Topic: How To Invest

Q: Hi. I have held Canoe EIT Income Fund for many years and its dividend payout of around 10% is attractive. I’d like to hear what you think of the fund. Many thanks.

Article Excerpt

A: Canoe EIT Income Fund, $11.93 symbol EIT.UN on Toronto (Units outstanding: 90.1 million; Market cap: $1.1 billion; www.canoefinancial.com), changed its name from EnerVest Diversified Income Trust in November 2013. The stock symbol remained the same. Canoe EIT is a closed-end fund that invests in a portfolio of dividend-paying stocks. Many are listed on the Toronto exchange. Closed-end funds are a lot like conventional, open-end mutual funds. They hold a diversified portfolio of stocks, chosen by a fund manager who gets a fee for his or her services. The key difference is that open-end funds stand ready to sell new fund units, or redeem existing fund units, on demand. Closed-end funds, on the other hand, work with a fixed asset base invested in a portfolio of securities. The value of those assets rises and falls, depending on how the fund manager invests. The units of a closed-end fund trade like stocks, and mostly on a stock exchange. They may trade above the…