Portfolio Manager Matthew Cardillo discusses how the ETF works and why it should be part of an investor's portfolio.
Female: What does portfolio completion mean?
Male: Portfolio completion means that we are giving Canadian retail investors access in an active ETF vehicle to those non-traditional or less utilized asset classes available in the financial marketplace. These are not in traditional Canadian portfolios today to a big degree.
Female: What is MPCF designed to do?
Male: MPCF is designed to take advantage of the less correlated return streams offered by non-traditional asset classes in a way that enhances the overall investor experience. And for us at Mackenzie, enhancing means raising the portfolio efficiency, so that would be from a Sharpe Ratio standpoint, and reducing correlation. So, you want something that's going to smooth out or improve the overall investor experience.
Female: What is the investment process of MPCF?
Male: We've actually designed and built a proprietary process on the Systematic Strategies Team to manage MPCF, and this process, it takes historical systematic information on these asset classes from a return standpoint, a correlation standpoint, a volatility standpoint. We measure that historical information automatically and we actually will then, as a team, get together and decide if there's some forward-looking economic information that's going to affect those historical numbers.
Female: Why invest in this ETF?
Male: This should be part of an investor's portfolio for two reasons. Number one, you know, diversification. So, we at Mackenzie feel that the only free lunch available in finance is diversification, and so this allows investors to take advantage of the diversification offered by non-traditional asset classes. You know, asset classes that are far more numerous than what they find in the traditional core portfolio. Reason number two, this is what the smart money has been doing for decades. You know, large, sophisticated institutional investors all over the planet, big pension plans in Canada, sophisticated university endowments, sovereign wealth funds, they've been doing this for multiple decades, and the reason they're doing it is they're taking advantage of those less correlated return streams offered by non-traditional asset classes. It improves portfolio efficiency. So, we've taken this idea and we've created MPCF to allow Canadian investors, retail investors, to take advantage of that smart money idea in an active ETF form.