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Credit Opportunities Fund

Differentiated strategy

Credit investing is an attractive long-term asset class, offering more defensive characteristics and less volatility than public equity markets, with higher returns than traditional fixed income. The fund is unique because of the following attributes:

  • Invests primarily across multiple asset classes of the Canadian credit markets, which is not a widely available strategy
  • Offers the potential for better returns than traditional fixed income with significantly lower risk and volatility than public equities
  • Provides attractive risk adjusted returns and can help diversify your overall investment portfolio
  • Primary objective is to preserve capital while generating attractive income
  • Technical expertise required to discover, analyze, and invest in the universe of opportunities

Our approach

The main priority is on downside protection, which takes precedence over short term returns. The portfolio will be diversified across issuers, industries, and sectors of the credit universe.

  • Credit analysis is conducted with the intentions to hold individual investments to maturity and not to trade
  • Interest rate exposure is managed conservatively
  • The strategy will look to de risk if credit markets are deemed expensive by investing in higher quality issuers and moving up the capital structure; this action will sacrifice returns but preserve capital
  • There will be occasional negative months given market volatility but interest income and the “pull to par” or “maturity at par prices” repairs drawdown over time, assuming credit analysis is correct

What we don’t do

Throughout the investment approach, consideration for excluded activities are also an integral part of the strategy.

  • The strategy does not utilize financial leverage
  • We will not sell “short” riskless securities against “long” positions in more risky securities
  • The strategy has limits across all of its asset classes and does not concentrate its investment grade securities in BBB rated bonds
  • We will not make large bets on any one sector of the economy or any single corporate exposure
  • We will not actively trade the portfolio
  • We will not take excessive bets on duration
  • The fund will not aim for annual returns beyond 4% to 8% by utilizing the above strategies, although higher returns are possible when exiting unusual periods of severe market dislocation