Aventine Asset Management Inc.

The Aventine Stable Income Fund

“Peace of mind in a low interest rate world.”

Fund Overview

Aventine Stable Income Fund is an actively managed, low volatility income portfolio with a principal focus on bonds, preferred shares and high quality dividend paying equities. The primary goal of this Fund is to provide investors with a high level of tax effective income, while also generating consistently positive investment returns overall. The Fund seeks exposure to a variety of income sources and considers the optimal portfolio as one which balances current yield with both capital preservation and long term inflation protection.

Investment Objectives

  • Consistently positive total returns.
  • Low volatility and downside risk exposure.
  • 5% annual distribution yield.

Investment Approach

The Fund will aim to generate a stable level of income and a consistently positive total return throughout the credit and business cycles by employing several strategies with diverse drivers of potential return.  The Managers strategically allocate capital across four core investment strategies to obtain exposure to the most attractive opportunities available, while also giving consideration to the macroeconomic environment. The four core investment strategies of the Fund are: Flexible Fixed Income, Preferred Share Relative Value, Enhanced Dividend Equity, and Structured Securities.

The Fund has flexibility to invest in income oriented securities at any level of an issuer’s capital structure, as well as in government issued securities and hybrid securities issued by Canadian banks.  When assessing investment opportunities the manager attempts to determine the most attractive part of an issuer’s capital structure, including investment grade bonds, high yield bonds, convertible bonds, preferred shares or common shares.  Each investment is evaluated in the context of its ability to deliver an attractive total return, as well as its potential impact on risk to the Fund overall.  The Fund may invest a portion of its capital in income producing assets, sectors or products that are overlooked by the mainstream investment community, while also seeking to preserve capital and mitigate both downside risks and volatility risks through various portfolio controls and hedging techniques.

We expect that the Fund’s flexible approach to capital structure investment, diversified return sources, risk management capabilities and focus on value investing will result in relatively high income with relatively low volatility and lead the portfolio to achieve high risk-adjusted returns for investors.

Suitability

The Stable Income Fund is an ideal solution for investors seeking to generate above average yield without taking a high level of equity market or interest rate risk. The multi-strategy approach of this Fund has consistently produced positive returns across a variety of market environments and offers forward thinking investors an excellent answer to the challenges of high valuations in blue chip dividend stocks and low yields on high quality bonds.

Stable Income Fund Performance

The Aventine Stable Income Fund, launched on January 13, 2017, is the natural evolution of Aventine’s Stable Income strategy which has been run on a discretionary, managed account basis for Canadian investors since December 2008.  Andrew Shortreid has been the lead portfolio manager of the strategy since June 1, 2009 and continues to lead the Fund’s investment team.  Jim Pottow and James Telfser became co-managers of the strategy in 2016 and are also co-managers of the Fund.  Since inception, the multi-strategy Stable Income approach has consistently generated strong, low volatility absolute returns while providing investors with an attractive tax efficient income stream.

The below information, for the Aventine Stable Income Composite, is current as of November 30, 2017.

Performance Highlights

  • Annualized ROI of 8.1% Since Inception
  • No Negative Calendar Years Since Inception
  • Sharpe Ratio: 1.51
  • Best 12-Month Return: +19.9%
  • Worst 12-Month Return: -4.8%

Stable Income Fund
Stable Income Fund
Stable Income Fund
Stable Income Fund

Benchmarks