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FIXED “INCOME” ISN’T...

Fuelled by decreasing interest rates, bonds enjoyed a 30 year bull run. That performance is the main reason investors use bonds as a cushion against stock market volatility.

Things have changed.

Increasing rates hurt fixed income investors

The FTSE Canada Universe Bond Index returned -4.96% from January 1 to October 31, 2021. 

 

"Scotiabank sees eight Bank of Canada interest rate hikes by end of 2023."  Financial Post, October 20, 2021 

Even if the Bank's prediction is only partially right, long-only fixed income fund investors are facing more losses.

What is the solution?

Recommendations often fall into three buckets.

1. Alter your fixed income allocation using traditional bonds.  The trouble is that rates are too low and rising, offering a low or negative return, and minimal portfolio buffer effect. 

2.  Shift to bonds with more credit risk or to equities that pay income.  These options have interest rate exposure and they can introduce inappropriate risks for your capital preservation bucket.

3. Consider fixed income alternatives.  Institutional investors have switched to effective alternatives. It’s time for you to optimize your portfolio by following their lead.

Keep it simple

The crux of the problem is interest rate risk.   We offer alternative solutions with little or no interest rate risk. 

 

We have demonstrated expertise and commitment to style and, in the process, produced alpha and downside protection. Our track record of absolute returns and low volatility make for compelling fixed income solutions.

LEARN MORE:

Active, investment grade credit, with virtually no exposure to rates >

Proven mix of insured, residential, and construction mortgages >

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Let us show you how substituting a portion of your fixed income exposure with

YTM Capital Credit Opportunities Fund transforms your portfolio outlook.