Bernie,
I remembered that ACG had some 10+% bonds in its portfolio, but not what the weightings and maturities were. It would then seem that the 0.84 annualized dividend (last monthly x 12) is relatively secure. Indeed, it has paid between 0.075 to 0.065/share/mo for the last year (currently 0.07/share/mo). In the current risk environment, investors have bid ACG to return 9.8%/yr. I can't predict the future, so I have no way to say whether this price/yield level will increase or decrease, all I can say is that it WILL change.
Arcane mathematical formulae indeed!! All I have discussed is the mathematical properties of AIM!! Ok, that may be arcane to the vast majority of investors, but not to us. I'll admit that it does make me a bit uncomfortable to think of buying one of these funds at a premium, yet when I look at the AIM model, it tells me not to worry about it. When prices return to a discount to NAV, and/or when interest rates start rising again, and/or the current risk environment changes, AIM will let us buy some of the 'cheap' shares.
Robert ( Call me Mr Arcane!!) |
