Mackenzie's Fixed Income Models
Understanding how to manage duration, credit risk and correlation when allocating fixed-income securities is more important than ever. Rethinking how and why various fixed income assets are combined in a portfolio can help maximize its risk and return characteristics.
It's all about the right combination
Fixed-income investments exist along a spectrum of principal loss and corresponding yields. There are several sub-asset classes that exhibit different volatilities and return patterns, and that therefore play very different roles within the portfolio.
Mackenzie's Fixed Income Models*
Mackenzie Investments has created three models as examples of how Mackenzie Mutual Funds and/or Mackenzie ETFs could be used within portfolios for different objectives, risk profiles and time horizons. Consider three models that allocate to various fixed income sub-asset classes, based on a desired outcome.
Optimised Core Bond
|Investor's Objective||Designed for investors seeking a higher level of income over a market cycle while attempting to preserve some of the diversification benefits of conventional fixed income portfolios.||Designed for investors seeking to largely preserve the role of conventional core fixed-income holdings in terms of lowering correlation to equity holdings while still offering the potential for a moderate level of income.||Designed to target a lower level of duration than in conventional core fixed income products for investors whose objectives might include lower levels of volatility or a preference for capital preservation.|
|Model's Objective||Intended to deliver a higher level of income with lower levels of volatility than conventional higher-yielding investments.||Intended to approximate the return of the FTSE TMX Canadian Bond Universe Index with a lower level of volatility.||Intended to maintain an average portfolio duration below that of the index over a market cycle, differentiating returns in periods of rising rates or market stress.|
A range of possible allocations to various Mackenzie Fixed Income Funds / ETFs are used to build each model:
|Fixed Income Asset Class||Mackenzie Fixed Income solutions^|
|Canadian Fixed Income||Mackenzie Canadian Short Term Income Fund |
Mackenzie Canadian Short Term Fixed Income ETF (ticker: MCSB)
Mackenzie Strategic Bond Fund
Mackenzie Core Plus Canadian Fixed Income ETF (ticker: MKB)
|Floating Rate Income||Mackenzie Floating Rate Income Fund |
Mackenzie Investment Grade Floating Rate Income Fund
Mackenzie Floating Rate Income ETF (ticker: MFT)
|Global Fixed Income||Mackenzie Global Tactical Bond Fund |
Mackenzie Core Plus Global Fixed Income ETF (ticker: MGB)
|High Yield||Mackenzie Unconstrained Fixed Income Fund |
Mackenzie Unconstrained Bond ETF (ticker: MUB)
^ Holdings between mutual funds and ETFs with similar mandates have been, and may continue to be dissimilar. This fact could result in different risk and return profiles over time between a mutual fund and an ETF with a similar mandate.
Read Mackenzie's Fixed Income Models brochure to learn more or
speak to you Mackenzie Sales Representative.