Aberdeen Asia-Pacific PRM Inc.

FAP-T

Analysis and Opinions about FAP-T

Signal
Opinion
Expert
BUY
BUY
September 4, 2014

The majority of it is Australian dollar bonds. You have to look at the outlook for rates as well as the Australian dollar. His view is neutral on the currency. He believes Australia will outperform Canada in terms of bonds.

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The majority of it is Australian dollar bonds. You have to look at the outlook for rates as well as the Australian dollar. His view is neutral on the currency. He believes Australia will outperform Canada in terms of bonds.

COMMENT
COMMENT
August 18, 2014

It always worries him when he sees a closed-end fund like this. This is a global bond fund, so you have currency exposure to different currencies, mostly Asia and other emerging markets. What concerns him is that the fund is allowed to use leverage and does so. He really wonders how many investors really understand this. They provide a steady income to investors, but part of that is return of capital, not just income. You have to understand that you are buying a levered fund, and the leverage is reasonably substantial. A rising interest rate would squeeze you. It’s trading at around NAV, but paying out more than the income, so part of the return is return of capital.

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It always worries him when he sees a closed-end fund like this. This is a global bond fund, so you have currency exposure to different currencies, mostly Asia and other emerging markets. What concerns him is that the fund is allowed to use leverage and does so. He really wonders how many investors really understand this. They provide a steady income to investors, but part of that is return of capital, not just income. You have to understand that you are buying a levered fund, and the leverage is reasonably substantial. A rising interest rate would squeeze you. It’s trading at around NAV, but paying out more than the income, so part of the return is return of capital.

PAST TOP PICK
PAST TOP PICK
July 14, 2014

(Top Pick May 26’14, Down 5.45%) Nothing has gone wrong. He still likes it. They just cut their dividend a little, but he expected that. He would add to it if it got above $6.50.

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(Top Pick May 26’14, Down 5.45%) Nothing has gone wrong. He still likes it. They just cut their dividend a little, but he expected that. He would add to it if it got above $6.50.

TOP PICK
TOP PICK
May 26, 2014

Bonds have a historical seasonal time in June. Started a bit early this year. Had a bottom in the early part of the year and is currently just poking its head above short-term resistance at $6.14. That will bring in the $7 range and if we get above that and in the $7.80 area, then the sky is the limit. This is made up of 70% government bonds, 17% corporates, pretty high quality and the rest is super nationals. Risk/reward is in your favour. Downside risk is about 6%.

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Bonds have a historical seasonal time in June. Started a bit early this year. Had a bottom in the early part of the year and is currently just poking its head above short-term resistance at $6.14. That will bring in the $7 range and if we get above that and in the $7.80 area, then the sky is the limit. This is made up of 70% government bonds, 17% corporates, pretty high quality and the rest is super nationals. Risk/reward is in your favour. Downside risk is about 6%.

PARTIAL BUY
PARTIAL BUY
February 24, 2014

Closed end fund buying Australian dollar bonds. Have had higher yields in that country over time. Small part of your portfolio.

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Closed end fund buying Australian dollar bonds. Have had higher yields in that country over time. Small part of your portfolio.

DON'T BUY
DON'T BUY
August 30, 2006
A basket of world bonds. This gives you currency risks. The stronger Canadian dollar would be negative on foreign bonds.
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A basket of world bonds. This gives you currency risks. The stronger Canadian dollar would be negative on foreign bonds.
BUY
BUY
May 8, 2006
When interest rates rise, bond prices tend to fall. This is why this stock has been dropping. They have also had a weakening Australian/New Zealand dollar. Long-term, if your expectations are for steady growth, this is a way to take advantage of global/Asian markets.
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When interest rates rise, bond prices tend to fall. This is why this stock has been dropping. They have also had a weakening Australian/New Zealand dollar. Long-term, if your expectations are for steady growth, this is a way to take advantage of global/Asian markets.
PAST TOP PICK
PAST TOP PICK
February 25, 2005
(A Top Pick Dec 3/04. Up 6.5%.) A pure income play based on prime Australian bonds as well as some Asian bonds. Recommended on the possibility that we would be hitting a rocky period in the 1st quarter. Pays about 7%. Still a good buy.
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(A Top Pick Dec 3/04. Up 6.5%.) A pure income play based on prime Australian bonds as well as some Asian bonds. Recommended on the possibility that we would be hitting a rocky period in the 1st quarter. Pays about 7%. Still a good buy.
TOP PICK
TOP PICK
December 3, 2004
If the markets are going to be a little dangerous and you want some stocks that are producing some income, this would be a core holding. Currency related in that their prime holdings are prime Australian and Asian bonds. 8.5% yield.
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If the markets are going to be a little dangerous and you want some stocks that are producing some income, this would be a core holding. Currency related in that their prime holdings are prime Australian and Asian bonds. 8.5% yield.
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