Topic: How To Invest

Q: We are holding a position in Blue Ribbon Income Fund (RBN.UN). We are considering building on that position. May I have your thoughts, please?

Article Excerpt

A: Blue Ribbon Income Fund, $8.37, symbol RBN.UT on Toronto (Units outstanding: 12.8 million; Market cap: $107.1 million; www.bromptongroup.com), was formerly called the Citadel Diversified Investment Trust. This fund holds a lot of former oil and gas trusts, pipeline or other utility trusts (most if not all now converted to conventional corporations), real estate investment trusts and stocks. Its top holdings include Manulife Financial, Keyera Corp., Boralex Inc., Premium Brands Holdings, Altus Group Ltd., Superior Plus Corp., Ag Growth International, Cineplex Inc., Sun Life Financial and Transcontinental Inc. Its breakdown by industry group is Utilities, 22.0%; Financial, 20.3%; Industrial, 17.7%; Consumer products, 15.8%; Real estate, 9.0%; Materials, 7.9%; Oil & gas, 3.7%; and Healthcare, 3.3%. The fund’s MER is 1.0%. The Blue Ribbon Income Fund yields a high 7.2%. However, its portfolio does not pay enough dividend income to sustain that yield and pay the fund’s management expenses and fees. To make up the difference, it does hold some riskier stocks with above-average yields,…

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