TORONTO: Sentry Select Capital Inc. (“Sentry” or the “Manager”) is pleased to announce that it will complete the restructuring of Sentry Select MBS Adjustable Rate Income Fund II (the “Fund”) on March 31, 2011 (the “Effective Date”). As of the Effective Date, the Fund will be renamed “Sentry U.S. Growth and Income Fund” and will be administered as a National Instrument 81-102- Mutual Funds compliant open-end mutual fund.
As a part of its restructuring, on the Effective Date the Fund's investment objective will be changed to require that the Fund seek a balance of current income and long-term capital appreciation by investing primarily in a diversified portfolio of dividend-paying U.S. equity securities, including common and preferred shares and, to a lesser extent, interest bearing securities, such as bonds, bills or bankers’ acceptances. The Manager believes that the U.S. market offers an excellent investment opportunity for the application of Sentry's investment style.
On the Effective Date, the Fund’s existing Class A and Class X units will be consolidated and renamed Class X units. Beginning April 1, 2011, the Fund will be eligible for daily redemptions. While the Manager is currently not accepting purchase orders of units of the Fund, it is anticipated that units of the Sentry U.S. Growth and Income Fund will be available for daily purchase once qualified for distribution under a simplified prospectus, which is expected to occur on or about May 27, 2011. At this time, it is expected that the Fund will offer Series A, Series F and Series I units with applicable fees similar to those of other equity funds within the Sentry Group of Funds.
As of the Effective Date, the Manager will be paid only that portion of the management fee that the Manager pays directly to investment dealers as a servicing fee. This will continue for a period of five years for existing unitholders. To that end, the management fee payable to the Manager by the Fund in respect of the Class X units of the Fund will be set at 0.40% per annum of the monthly average of the daily class net asset value per unit of the Fund.
Sentry is also pleased to announce that the Fund’s indicative distribution amount, beginning with the April distribution, will be $0.017 per Class X unit/per month. Based on the latest net asset value per unit of $5.85, the annualized yield will be approximately 3.5%. Please note, however, that if the make-up of the Fund’s portfolio changes, actual distribution amounts may differ.
An added benefit of the restructuring is that the Fund will be able to preserve its current tax losses, which amount to approximately $69 million in capital losses and $20 million in accrued non-capital losses.
Sentry Investments: Sentry Investments is a Canadian asset management company that offers a diverse range of investment products including mutual funds, hedge funds, flow-through limited partnerships and other alternative investments, covering a variety of domestic and global mandates.
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