Trimark fund capped

The AIM Trimark group caught almost everyone by surprise when it announced that it was capping the popular Trimark Advantage Bond Fund effective May 30, giving only 10 days advance warning.

The decision to close the fund to new investors was due to an overabundance of success. While many mutual funds have been losing assets, Trimark Advantage Bond took in $250 million in new money in the first four months of this year and now holds over 40% of the assets in its category.

One of the reasons for the fund’s popularity is that it is not a pure high-yield fund. About a quarter of the portfolio is in government securities, thereby creating a low-risk core upon which the managers can build. This gives the fund one of the best safety ratings in the category and it has never lost money over a calendar year since it was created back in December 1994.

Another big plus for income investors is the fact the fund pays monthly distributions. Using the trailing 12-month total, the cash yield is 6.4%, based on a recent NAV of $5.64. I don’t expect it to be that high over the next 12 months, but anything in the 5% range would be very acceptable to most investors.

The go news is that if you already own units in this fund, you can continue to add to your position without any limitation. Only new investors are excluded.

Adapted from an article that originally appeared in Mutual Funds Update, a monthly electronic newsletter of common sense mutual fund advice edited by Gordon Pape. To take advantage of a three-month trial subscription available to users for just $9.97 plus tax, go to