All-American Term Trust Inc. -- Distribution Declaration, Portfolio Statistics and Quarterly Commentary.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 7, 2000 All-American Term Trust Inc. (NYSE NYSE See: New York Stock Exchange : AAT Alpha-1-antitrypsin (AAT) A blood component that breaks down infection-fighting enzymes such as elastase. Mentioned in: Chronic Obstructive Lung Disease ), a closed-end management investment company with an investment objective of providing a high level of current income, consistent with the preservation of capital Preservation of Capital An investment strategy whose primary goal is to prevent the loss of an investment's total value. Notes: For investors using the capital preservation strategy to achieve their goal, they must ensure their portfolio is producing a return that is at , today announced that the Trust's Board of Directors has declared a dividend from net investment income of $0.0600 per share. The dividend is payable on August 31, 2000 to shareholders of record as of August 18, 2000. The ex-dividend date Ex-dividend date The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment ( i.e. the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend. August 16, 2000. The Fund's investment objective is to provide a high level of current income consistent with capital preservation. Based on the Fund's net asset value of $12.40 per share as of July 31, 2000, the time remaining until the Fund's termination on or about January 31, 2003, and assuming the continuation of current market conditions, Mitchell Hutchins believes that it is unlikely that the Fund will be able to return the full amount of its $15 initial offering price to shareholders upon its termination. Portfolio Statistics (% of total portfolio assets) as of July 31, 2000:
Composition Credit Quality
--------------------------------- --------------------------------
Corporates 54.73 % AAA 45.27 %
ARMs / Mortgages 29.12 AA 0.89
Municipals 9.59 A 10.91
Cash & Cash Equivalents 4.42 BBB 31.70
Treasuries / Agencies 2.14 BB 6.48
100.00 % B 1.76
Non-Rated 2.69
Top Five Sectors Below B 0.30
---------------------------------
Finance / Banking 14.38 % 100.00 %
Energy 9.80
Municipals 9.59 Characteristics
--------------------------------
Cable / Media 6.73 Weighted Avg Maturity 4.16 yrs
Tobacco 2.75 Weighted Avg Duration 2.38 yrs
43.25 % Weighted Avg Coupon 6.65 %
Yields Leverage 28.38 %
---------------------------------
Market Yield 6.19 % Net Asset Value $12.40
NAV Yield 5.81 % Market Price $11.63
IPO Yield 4.80 %
Market yield is calculated by multiplying the current month's distribution by 12 and dividing by the month-end market price. NAV See navigation system and navigation bar. yield is calculated by multiplying the current month's distribution by 12 and dividing by the month-end net asset value. IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. yield is calculated by multiplying the current month's distribution by 12 and dividing by the initial public offering price. Prices and yields will vary. The Fund is actively managed and its portfolio composition will vary over time. Commentary The market tone at the end of the second quarter has shifted dramatically as conditions in the market appear more stable. Recent data has pointed to a moderation of growth that should potentially alleviate the need for further rate increases. However, we believe that one month of softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. data does not necessarily depict the entire story. As market participants The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. have become less concerned about the Federal Reserve, spread sectors such as corporate bonds and mortgage securities have slightly recovered from their weakness of the past few months. Investors are becoming more comfortable with credit risk, as stock market volatility has moderated and spreads are at their widest levels in recent history. (The spread is the difference in yield or income over Treasurys that fixed-income securities Fixed-income securities Investments that have specific interest rates, such as bonds. must pay to compensate investors for their greater risk.) Portfolio Positioning Because the Trust will terminate on or about January 31, 2003, its duration (a measure of a bond fund's sensitivity to interest rates) is constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. . The high-grade portion of the portfolio, which is becoming a larger allocation as we near the termination date termination date, n See expiration date. , continues to favor the finance sector. The broker/dealer paper is focused on some of the A-rated issuers, which we believe are priced attractively relative to their AA-rated counterparts. Within the banking industry, the Trust is focused on BBB-rated credit card companies, such as Providian National and Capital One Financial. Over the past quarter, the Trust has reinvested some of the proceeds generated from high-yield credit sales into several industrial credits, including Goodyear Tire and KN Energy. The Trust's second-quarter performance was negatively impacted by some of its high-yield positions. The second quarter was a particularly difficult time for the high-yield sector as mutual fund redemptions continued unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. in the face of reduced market liquidity, as dealers backed away from market-making activities. The situation was further exacerbated by rising bond defaults, the Fed's interest rate hikes and increasing volatility in the stock markets. These factors and other adverse conditions produced some of the widest high-yield spreads relative to U.S. Treasurys U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. in the last 10 years. Outlook We believe the Fed's ability to engineer a soft landing is looking more probable. With valuations at attractive levels and investors' large cash positions, we believe the corporate and mortgage sectors are poised to tighten. As the Trust's termination date nears, we will continue to focus on increasing the portfolio's high-grade sector allocation Sector allocation Investment of certain proportions of a portfolio in certain sectors. See: Industry allocation. . The commentary reflects our views at the time of this writing. These views may change in response to changing circumstances. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion