Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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The
Unique Fund that can Protect Your Portfolio from Rising
Inflation |
Published:
March 3,
2007
The Western Asset/Claymore Inflation-Linked Securities
Fund (NYSE: WIA, $12.28) is built to weather stormy markets. Whether the
tailwinds are credit writedowns, inflation fears, a slumping dollar,
or interest rate surprises, this fund has it covered.
As of October 31, 2007, over 80% of its $390 million portfolio was
invested in U.S. Treasury inflation-protected securities (TIPS) with
the highest "AAA" credit rating. TIPS pay a fixed rate of interest,
but the government adjusts their principal value each year by the
rate of consumer inflation. The end result is a security that
increases in value as inflation rises.
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The balance of the portfolio was invested in government-backed
mortgage securities and higher-yielding corporate bonds like Ford's
(NYSE: F) 7.45% note. The portfolio wasn't leveraged, but hedging strategies
were in place to limit risk. The fund may also invest up to 40% of
its assets in non-U.S. dollar inflation-linked securities to hedge
against the falling dollar -- a strategy that has worked well in recent
months.
After hiking the payment +10% in October, WIA pays a monthly
dividend of $0.0575 a share, which equates to $0.69 annually.
Including the year-end capital gains payout of $0.0467, the total
annual payout of $0.7367 gives a yield of 6.0%. An annual management fee of 0.79% of the
fund's average weekly asset value takes a small bite out of
distributable income.
The distribution is taxable as ordinary income, but the portion
coming from U.S. TIPS -- over 70% in 2006 -- is exempt from state
income tax in many states. A dividend reinvestment plan is available
and potential investors can contact the fund at 1-866-486-2228 for
more information.
WIA raked in returns of over +13% in the past year, placing it at
the top of the leader boards for its category. With year-to-date
returns of close to +5.5%, WIA is on
track for a successful 2008. Also, the fund has traded at a double-digit
discount to its portfolio value since September 2005, and despite the
recent price run-up, WIA is still attractively priced at a
-12% discount.
Action To Take ---> With its
defensive portfolio of low-risk inflation-linked Treasuries, this
fund is well-suited for conservative investors looking to weather a market downturn.
Good investing!
Carla Pasternak
Editor
High-Yield Investing
http://www.StreetAuthority.com
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opportunities each month, plus access to several model portfolios,
please subscribe to Carla Pasternak's premium newsletter -- High-Yield
Investing. |
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