DBRS Publishes Methodology for Rating Structured Income Funds

DBRS has today published its methodology for rating structured income funds.

To date, DBRS has applied its stability ratings only to income trusts, but with the release of this methodology, the stability rating scale will now also apply to Canadian investment income funds. A stability rating provides an opinion on both the stability and sustainability of a fund’s cash distributions per unit. Stability ratings are meant to provide guidance to investors who are interested in an independent opinion on whether the current or expected distributions paid by a fund are sustainable over the longer term. DBRS stability ratings generally do not take factors such as pricing or expected market risk into consideration and are expected to be used as only one element of the investment decision-making process.

“Stability Ratings for Structured Income Funds” covers the main factors that DBRS will consider in assigning stability ratings to income funds, such as the credit quality and types of assets held by the portfolio. Ratings may be assigned to open-end funds, closed-end funds or exchange-traded funds (ETFs).

The methodology providing DBRS's processes and criteria is available by contacting us at info@dbrs.com.