Dividend:  After introducing a managed distribution policy in January 2008, the fund's monthly dividend has doubled to a current $0.0484 per share. That equates to $0.58 a share annually, giving MIN a hefty yield of 9.4% of today's share price.

The distribution policy calls for the fund to make distributions at a fixed rate of up to 8.5% of the fund's average monthly net asset value each year. An annual management fee of 0.75% of the portfolio assets takes a small bite out of the income available for distribution.

In 2007, almost all of the distribution came from earnings and was taxable at the ordinary income rate. However, with the introduction of the managed distribution plan this year, the tax breakdown could vary.

The fund offers a dividend reinvestment plan that reinvests all distributions or only long-term capital gains at the shareholder's option. 

Performance:  Over the past year, the fund has delivered returns of over +10%, ranking in the top 1% of its category of taxable bond funds. The fund's managed distribution policy, along with its well-positioned holdings of outperforming U.S. Treasuries and foreign government bonds, have contributed to its strong results. The policy of holding assets in U.S. dollars does keep the fund from benefiting from the dollar's decline, however, it also makes for more stable returns -- which aren't buffeted by currency volatility.

In an effort to provide a more competitive yield, last October management widened the fund's mandate to allow investments in higher-yielding (but still investment-grade) bonds that may not be actively traded on the public exchanges. This change slightly reduced the portfolio's average credit rating from "AAA" to "AA+."

Outlook/Valuation:  Going forward, the fund's focus on high-grade U.S. and foreign government bonds should continue to yield above-average returns as investors seek safe havens amid volatile global markets. Over the long-term (5-plus years), we would expect the fund to provide steady average returns of about +6% annually, just as it has for the past decade. 

Despite its solid returns and high-grade portfolio, the fund is still selling at a discount of -9.2%, in-line with its 10-year average.

MIN offers a generous monthly income stream and steady returns amid volatile markets. It's appropriate for more conservative investors looking for high single-digit returns over the long term.

Good investing!

Carla Pasternak
Editor
High-Yield Investing

About High-Yield Investing

High-Yield Investing is a monthly investment newsletter that brings you a wealth of information on the market's leading income stocks and funds, as well as a host of relatively unknown investment options that you probably won't find coverage of anywhere else. Many of these securities provide investors with annual dividend yields of 10%, 15%, even 20% or more. The newsletter not only provides subscribers with investing ideas that produce incredibly high dividend yields, but the kicker is that these high-yield investments have also consistently outperformed the major market averages. (Learn More)

About Carla Pasternak

Editor of StreetAuthority.com's High-Yield Investing newsletter since its inception in May 2004, Carla Pasternak draws on a variety of financial backgrounds to make profitable calls on income-generating stocks for her readers.

Carla has been employed in the investment industry for more than two decades. In addition to her work as a writer for several nationally recognized financial publishers, her previous experience includes a position as president of a well-respected investor relations firm. She has also been writing shareholder reports for public companies since 1980.

A highly successful investment analyst, Carla specializes in high-yield, income-paying stocks. In that pursuit, she's always mindful to select companies that not only pay rich dividends, but that also deliver strong long-term capital gains. Furthermore, Carla's experience in writing SEC filings gives her the added insight required for her to truly understand a company's current and future financial health.

On the educational front, Carla holds BA, MA, MBA and Ph.D. degrees. When she's not watching the market, she's teaching business courses at the college level and managing millions of dollars in portfolio assets.

To learn more about Carla Pasternak's premium income investing newsletter -- High-Yield Investing -- please visit this link.