Bond mutual funds – This fund is still a buy

Article Excerpt

ABERDEEN ASIA-PACIFIC INCOME $4.39 (Toronto symbol FAP; Shares outstanding: 52.1 million; Market cap: $228.6 million; CWA Rating: Income) is a closed-end fund that invests mainly in Australian debt instruments. It also invests in U.S.-dollar-denominated Asian and Latin American bonds, and in bonds denominated in currencies from those countries. Right now it has 30.8% of its assets in Asian and Latin American currency bonds. Aberdeen Asia-Pacific lowered its monthly dividend by 16.7% with the January, 2008 payment, to $0.05 a unit from $0.06 a unit. The fund units now have a current yield of 13.5%. The fund’s bond holdings have dropped in value along with turmoil in global credit markets. The fund also holds 42.5% of its assets in Australian currency bonds. The Australian dollar has been especially hard hit by falling resources prices. Interest rate cuts have also pushed down the country’s currency. However, Australian banks have so far avoided the huge write-offs that have hit banks in other countries. The long-term outlook…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.