Navigating Changing Bond Markets
Steve Locke, Head of the Mackenzie Fixed Income Team, discusses strategies to navigate changing markets and provides an overview of the latest additions to the Mackenzie range of income solutions.
Steve Locke, Senior Vice President, Investment Management, Mackenzie Investments
In today’s low yield environment, many fixed income strategies that are traditional and core in nature are feeling the effects of rising yields. In fact, traditional fixed income strategies today and many traditional savings products are likely to experience negative total returns from time to time. This has changed for investors the feel of the upside and downside capture of traditional strategies, which means that maybe their portfolios today need to be augmented and changed to include some non-traditional sources of income and capital preservation.
Now is a great time for investors to look at changing the mix of their fixed income portfolios to deal with this low yield environment and the potential rising yields to come.
Fixed income portfolios can always benefit from holding certain high quality investments such as government bonds and investment grade corporate debt. Those tend to mitigate certain types of risks in the overall client portfolio; however, enhancing yield and total return today depends on adding things like high yield bonds and floating rate loans and emerging market debt alongside those traditional core areas of fixed income. Overall that’ll deliver a higher total return experience and mitigate certain interest rate risks. Now that’s important to have that backed up by good credit research and good investment research overall, and an active solution will really provide that to you. In addition to that, if you’re looking for a more balanced portfolio, adding income-oriented equities such as dividend stocks can be helpful.
We’re proud to have been offering Canadian investors innovative solutions for the last 50 years. Our newest ETF and fund offerings are aiming to do just that through generating income and good risk adjusted returns to the client.
The first offering is the Mackenzie Global High Yield Fixed Income ETF, which adds to our active fixed income ETF lineup at Mackenzie. This fund employs our rigorous credit research to search out the best high yield opportunities globally and uses our active fixed income portfolio management style to enhance risk adjusted returns.
Our second new offering is the Mackenzie Global Credit Opportunities Fund. This mutual fund seeks to deliver to investors a global high yield basket and flexible active management to use alternative sources of high income to generate great risk adjusted returns.
The third new offering is Mackenzie’s US Strategic Income Fund. This balanced, single solution offers income oriented investors access to US dividend paying stocks and US fixed income, including higher yield oriented assets. This fund employs the same flexible, active approach to portfolio management that’s been so successful in Mackenzie’s Strategic Income Fund and Global Strategic Income Fund.
Our Fixed Income Team is really excited to bring our deep expertise and our active management capabilities to these new income solutions.