Topic: How To Invest

My friend has a large portion of his retirement dollars invested in the Cambridge High Income Fund. Could you please provide your analysis of this fund? Thanks.

Article Excerpt

Cambridge High Income Fund is a balanced mutual fund that holds 81.5% of its assets in stocks, 14.8% in bonds and 3.7% in cash. It has a 2.38% MER. We don’t currently recommend balanced funds, which hold both stocks and bonds. That’s because bonds are unlikely to perform as well in the next few years as they have in the past, mainly because interest rates will likely hold steady or rise. (Bond prices and interest rates are inversely linked. When interest rates go up, bond prices go down, and vice versa.) That means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings could produce capital losses. The fund’s stocks are of reasonably good quality, although it does focus on high-yielding REITs and former oil and gas trusts. It also takes on above-average risk with its bonds, including holdings from issuers like Inmet Mining and Perpetual Energy. We don’t recommend the Cambridge High Income Fund. Note that…

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