The Aventine Stable Income Fund fell 1.2% in May (F Class, net of all fees and expenses) as the Fund’s positioning suffered from falling commodity prices, contracting government bond yields and the corresponding rotation of equity investors into more defensive sectors. Overall the decline was orderly throughout the month, broadly mirrored what we saw across Canadian equity and preferred shares generally, and presents a buying opportunity in our opinion. Worries about the economy and housing market seem overblown at this point, but emotional investment views can take time to flush out. We’ve made no recent changes to our outlook: we still see both equities and bond yields moderately higher in 12 months’ time. Finally, we have begun to favor the more hybrid attributes of convertible bonds in our fixed income portfolio as a replacement for high yield exposure, which we see as fully valued.