WHY CREDIT?
Credit is a distinct asset class. It has low correlation to fixed income and equities and can be used to diversify your portfolio. It also offers meaningful absolute return potential.
What is credit?
Credit is a focused, special way of investing in bonds issued by high quality companies.
Bonds have two main risks: interest rate risk and credit risk. A credit fund eliminates interest rate risk by shorting government bonds. It is exposed to credit risk: the risk that a company will not pay back its debt. Credit risk is low for short term securities issued by high quality companies.
​
Interest rate risk is more volatile than credit risk. By eliminating interest rate risk, credit funds can produce meaningful returns with low volatility.
It sounds complicated
Although a credit fund has more moving parts than a traditional long-only bond fund, it is a strategy that has been successfully executed for many years. Our portfolio managers have spent several decades in credit markets.
The numbers speak for themselves
In the 8+ years since inception...
YTM Capital Credit Opportunities Fund beat every long-only bond fund in Canada* on return and is 2nd in Sharpe ratio.
Annualized return 6.63%
Sharpe ratio 1.06
Using standard deviation to measure risk, the Fund (4.8) had lower risk compared to long-only bond investing, as represented by the FTSE Canada Bond Universe Index (5.3).
The Fund also beat the Index by 5.29% per year on average during those 8+ years.
​
Let us show you how substituting a portion of your fixed income exposure with
YTM Capital Credit Opportunities Fund transforms your portfolio outlook.