ACM Commercial Mortgage Fund Announces 2013 Fund Highlights and 2014 Distribution Setting

Jan 15, 2014, 16:00 ET from ACM Advisors Ltd.

VANCOUVER, Jan. 15, 2014 /CNW/ -

2013 Fund Highlights

ACM Advisors Ltd. (the "Manager") is pleased to announce for the year ended December 31, 2013, ACM Commercial Mortgage Fund (the "Fund") grew to $301.6 million representing a 49% increase in the net assets of the Fund. With the economies of scale realized from this larger asset base, the annual expense ratio for the Fund has decreased as follows:

Class I and Class F       from 0.88% to 0.77%
Class A        from 1.16% to 1.04%
Class B, Class C, Class D, and Class E    from 1.38% to 1.25%

A total of $127.0 million in new mortgages were funded in 2013, representing 17 individual transactions.   These new loans further enhanced the diversification of the Fund and increased the total number of investments within the portfolio to 44.  Importantly all investments in the Fund remain current and are being repaid as agreed.

For the year ended December 31, 2013, the Fund generated the following returns, net of all fees and expenses:

Class I and Class F       3.46%*
Class A        3.21%*
Class B, Class C, Class D, and Class E    3.00%*

*Assumes all distributions are reinvested in the Fund.

During the year interest rates went up, with the yield on the 10 year Government of Canada bond increasing by almost one per cent.  With credit spreads remaining relatively flat over the course of the year, the increase in rates caused the Fund's Net Asset Value ("NAV") to decline by approximately 1.9%.  Given the shorter duration of the Fund (2.8 years as at year-end), the impact of increasing rates was lessened and the income generated by the portfolio more than offset this NAV decline as evidenced by the net returns above.

The effects from the increase in interest rates can also be seen in the annual performance of general Canadian bond market indices:

DEX Universe -1.19%
DEX 91-day T-Bill 1.01%
DEX Short Term 1.74%
DEX Mid Term -0.63%
DEX Long Term -6.16%
DEX Real Return -13.07%
DEX Corporate 0.84%
Source: PC-Bond  

2014 Distribution Setting 

As a mutual fund trust, the Fund distributes all income to its unitholders. The monthly distribution per unit is set based on an estimate of the Fund's income for the calendar year and is reflective of the portfolio, interest rates, credit spreads and anticipated Fund growth.

Given the Fund's mandate of generating stable income flows while protecting investor capital, we remain focused on accretive lending opportunities that fit our conservative underwriting criteria.   Notwithstanding the recent increase in interest rates, all-in mortgage coupon rates remain near historical lows.  In order to support the Fund's current distribution level in today's environment, additional risk would need to be taken and we are not prepared to deviate from our lending discipline.  As a result, we deem it prudent to proactively and modestly decrease the Fund's monthly distributions by 2.5 cents per unit.  Effective February 1, 2014, the Fund's monthly distributions will be as follows:

Class I and Class F        47.5 cents per unit
Class A        45.2 cents per unit
Class B, Class C, Class D, and Class E    43.3 cents per unit

About the Fund

ACM Commercial Mortgage Fund is a pooled commercial mortgage fund available for investment by institutional and private investors. The Fund's objective is to generate stable income flows while protecting investor capital. The Fund is invested in a diversified portfolio of conservative mortgages secured by retail, office, industrial and multi-family properties located in urban and suburban markets across Canada.

About the Manager

ACM Advisors Ltd. is a fund management company specializing in the origination and underwriting of Canadian commercial mortgages. ACM Advisors Ltd. has over $1.5 billion in assets under management and administration, representing over 2,000 investors in four pooled investment funds. All investments in funds managed by ACM Advisors Ltd. are prudently underwritten in accordance with its comprehensive underwriting guidelines. The combination of the Manager's experience and guidelines has resulted in a 20 year track record of never having experienced a loan loss in any of its funds.

This news release has been prepared for information purposes only and should not be construed as a solicitation for, or offering of, an investment in securities in any jurisdiction where such offer or solicitation would be prohibited. The ACM Commercial Mortgage Fund is an exempt market security; prospective investors are advised to read the Offering documents and to consult with an independent financial advisor prior to making any investment decision based on this document. Minimum investment varies by province. The indicated rates of return are the historical compounded total returns including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any Unitholder that would have reduced returns. Mutual funds are not guaranteed or covered by a government deposit insurer, their values fluctuate frequently and past performance may not be repeated. The rates of return shown in the document are used only to illustrate the effects of the compound growth rate and are not intended to reflect future value of the Fund or future returns on investment in the Fund. Commission, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Information, opinions and statistical data contained herein were obtained or derived from noted sources believed to be reliable at the time of publication, but ACM Advisors Ltd. does not represent that any such information, opinions or statistical data is accurate or complete and they should not be relied upon as such. ACM Advisors Ltd. endeavors to provide accurate information throughout this document, but errors may occur and information and documents may become out of date. ACM Advisors Ltd. does not guarantee the accuracy, completeness, or timeliness of the information and documents. E&OE.


SOURCE ACM Advisors Ltd.