ACM Commercial Mortgage Fund Announces 2014 Fund Highlights and 2015 Distribution Setting

VANCOUVER, Jan. 15, 2015 /CNW/ -

2014 Fund Highlights
ACM Advisors Ltd. is pleased to announce for the year ended December 31, 2014, ACM Commercial Mortgage Fund (the "Fund") grew to $417.8 million representing a 39% 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 F and Class I	from 0.77% to 0.74%
Class A	from 1.04% to 1.00%
Class B, Class C, Class D, and Class E	from 1.25% to 1.21%

 

The total number of investments in the Fund increased to 63 as a result of 25 new mortgages totaling $168.9 million and 6 repayments totaling $18.6 million. The portfolio remains conservative with an overall loan-to-value ratio of 61% and debt service coverage ratio of 1.43 times. Importantly, all loans are current and being repaid as agreed.

The Fund's total returns are comprised of two components: income (interest payments received less Fund expenses) and the change in net asset value. The net asset value of the Fund is impacted by changes in underlying bond yields and credit spreads. Over the course of 2014, the yield on the 10 year Government of Canada bond decreased by 1.00% and the 5 year Government of Canada bond decreased by 0.64%. The decline in interest rates accelerated toward the end of the year, with the yield on the 10 year and 5 year Government of Canada bonds decreasing by 0.34% and 0.27%, respectively, during the fourth quarter alone. This trend of declining rates has been sustained through the start of 2015.     

The lending market also experienced a tightening of credit spreads over the course of the year. The combined effect of lower interest rates and tighter credit spreads resulted in a 3.00% increase in the net asset value of the Fund. The table below summarizes the total returns of the Fund, net of all fees and expenses, for the year ended December 31, 2014:

Class	Income	Change in NAV	Total Return
F and I	5.17%	3.00%	8.32%
A	4.91%	3.00%	8.05%
B, C, D, and E	4.70%	3.00%	7.83%

Returns are compounded monthly and assume all distributions are reinvested in the Fund.

2015 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, ACM remains focused on lending opportunities that fit the Fund's conservative underwriting criteria. 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 decrease the Fund's monthly distributions by 7.5 cents per unit. Effective February 1, 2015, the Fund's monthly distributions will be as follows:

Class F and Class I	40.0 cents per unit
Class A	37.6 cents per unit
Class B, Class C, Class D, and Class E	35.7 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 $1.8 billion in assets under management and administration, representing over 2,000 unitholders 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 informational 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 do 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 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. ACM Advisors Ltd. does not guarantee the accuracy, completeness, or timeliness of the information and documents. E&OE.

SOURCE ACM Advisors Ltd.

ACM Advisors Ltd., Lezlie Mintz, MBA, Director - Business Development, Ph: 647-748-6242 or 604-661-0663, [email protected], www.acma.ca