Preferred Income Fund

FACT SHEET: OCTOBER 2009

DESCRIPTION:
The “PREFERRED INCOME FUND (IG-PREF)” is a professionally managed portfolio of preferred shares.

ASSET MANAGER:
Faruk Jaffer, CIO of Index Gurus, Inc.

FUND OBJECTIVE:
The objective is to select investment grade preferred shares that provide stable income and capital preservation.

EXPENSES:
Tiered expense fee, including trades, starts at 0.95%.

MINIMUM INVESTMENT:
$50,000.

INVESTMENT SELECTION:
Securities have been selected based on credit ratings, volatility, call dates, distribution dates, and yield.

ASSET ALLOCATION:

Asset allocation of the Income Preferred Fund as of October 2009

Investment Grade Ratings of Preferred Stocks:

Moody’s investment grade ratings in order from the highest to the lowest are: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2 and Baa3.

Standard & Poor’s investment grade ratings in order from the highest to the lowest are: AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB and BBB-.

PERFORMANCE:

IG-PREF_093009_Performance

The graph compares three-year performance based on today’s holding of the Index Gurus fund, IG-PREF, against the PowerShares, PGF, as of September 30, 2009.  Dividends have been reinvested.

Why invest in the “Preferred Income Fund” through Index Gurus when I can select other preferred products like PSK, PGF or PFF?

  1. After researching the scope of income products, you will notice the emphasis of preferred shares in The Preferred Income Fund are in the non-financial sector.
  2. We select invest grade quality preferred shares to minimize investment risk.  The Chief Investment Officer is biased towards stable preferred shares with a long track record.
  3. You will get a stream of income from this portfolio and take advantage of various dates of payment.  If you want to know how this compares, then check out when the last payments were made on various preferred ETF’s.

What are Preferred Stocks?

Preferred stocks are termed fixed income securities. The term fixed income means that the preferreds pay fixed annual amounts as dividends (in quarterly, monthly or sometimes semi-annual payments) and these fixed payments generally do not vary over the life of the securities. The annual amount of the preferred dividend is normally expressed as a percentage (the coupon rate) of the liquidation preference

Risks?

RISKS: There are risks involved with investing, including possible loss of principal.  Past performance does not guarantee future results.  For more information on any individual security, ask your advisor for a prospectus.  The risks of investing in preferred shares include bankruptcy, interest rates, calls, tax events, mergers, tender offers, reports may not be filed, exchange delisting, deferred distributions, make-whole payments, original issue discount, and economic change.   Securities in your account are protected up to $500,000 through SIPC.  The performance figure on this page is based on the current model’s performance, which does not constitute a composite for purposes of AIMR reporting. As the performance is for illustration purposes, it does not reflect charges and expenses associated with the fund or brokerage commissions with buying and selling securities.  The model is subject to change.

Where are accounts opened?

TD Ameritrade Institutional where you will have account protection and login access.

Fees associated with the Preferred Income Fund:

  1. Index Gurus management fee
  2. TD Ameritrade Institutional cost per trade for equity is $9.99/trade.

Are you a financial adviser looking to help your clients with this product?

Please contact us because we value your client relationship and believe in team work.

The graph compares three-year performance based on today’s holding of the Index Gurus fund, IG-PREF, against our competitor at the PowerShares, PGF, as of September 30, 2009.  Dividends have been reinvested.