This strategy is a core Canadian fixed-income portfolio that combines socially responsible objectives with the aim of maximizing total return through interest income and capital appreciation. The portfolio is primarily invested in investment-grade fixed-income securities issued by Canadian governments and corporations. The return objective is to outperform the FTSE Canada Universe Bond Index as well as peers throughout economic and market cycles.
The strategy is managed in a socially responsible manner by excluding securities of issuers whose main activity is the extraction, production, or distribution of fossil fuels as well as those involved in armaments, adult entertainment, cannabis, gambling, nuclear energy, alcohol, and tobacco. The portfolio also integrates ESG criteria in the security-selection process and aims to invest in sustainable fixed-income securities.
100% FTSE Canada Universe Bond Index
Philosophy and process
The portfolio is actively managed with a medium- to long-term horizon, using a top-down multi-strategy approach that leverages diversified sources of added value.
The strategy is based on anticipating interest-rate movements from analysis of macroeconomic trends. Duration management and curve-positioning are therefore the main sources of added value, followed closely by sector allocation and issuer selection. From time to time, the managers may add securities denominated in foreign currencies, real return bonds or other securities in order to enhance returns and or reduce volatility.
To maximize its social and environmental impact, the strategy will seek to invest in all types of sustainable bonds insofar as these securities correspond to the fund’s strategy without compromising its risk profile. The sustainable issues targeted by the strategy include green bonds, social bonds, sustainability-linked bonds, and any other debt instruments that target social and/or environmental impact. Over the long term, the strategy aims to have 20% of its assets invested in sustainable fixed-income securities.
Risk is managed as per the following guidelines:
Duration positioning: +/-1-year vs index
Sector positioning: +/-25% vs index
Active yield curve positioning
Credit analysis of corporate issuers by leveraging the expertise and prudent approach of the iAGAM corporate credit team
ESG risk and opportunities analysis
Maintaining an average portfolio credit quality of AA
Maximum of 5% of the portfolio may be invested in high-yield bonds and senior loans
Currency risk is partially or totally hedged, at the discretion of the portfolio manager.
Why invest in these strategies?
Predominantly Canadian fixed-income exposure managed in accordance with responsible investment principles by an experienced management team with extensive industry expertise.
A positive-impact, fixed-income solution where environmental, social, and governance factors are an integral part of the fundamental analysis of the portfolio’s security-selection process.
Access to a well-diversified portfolio that offers daily liquidity.