Opinions
Glenn MacNeill, P.Eng.
Canoe EIT Income Fund
EIT.UN-T
BUY
May 20, 2009
A diversified trust mainly made up of income funds. Do a reasonably good job. A good, conservative, diversified way to play the income game.
$10.450
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COMMENT
Pays an 11% dividend yield. How are they paying that? They probably hold a lot of Canadian infrastructure but those stocks pay only 3-4%. The US component is also dragging down that yield. There's a mismatch here in holdings vs. the 11% yield. The total return will probably be 5-7%, but the high yield will limit share performance. This is a warning. Look at their top holdings and see how you feel about that.
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COMMENT
Not a fan of closed fund since the underlying securities will deviate from the net asset value of the fund. There are big dislocations. Underlying holdings are good quality companies. On a weighted basis, the yield is 3%, but the fund is paying 8%. This comes from the capital gains. It is not pure yield.
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