Approach

We invest in fixed income to reduce portfolio-level volatility and provide a source of funds during down-market periods.

Our fixed income approach targets measured and carefully considered active risk in the areas of sector and security selection, with a focus on liquidity. We do not attempt to anticipate short-term interest rate fluctuations. However, we will deviate in duration to achieve desired portfolio characteristics relative to our view on yield curve structure.

We place an emphasis on investment-grade corporate bonds, and typically favor sectors that provide an attractive yield relative to Government of Canada bonds. This includes corporate, provincial, and municipal credits.

Absolute protection of principal is paramount. In determining creditworthiness of borrowers, we employ a blended analytical process that combines the judgment of fundamental analysis with the efficiency and objectivity provided by modern quantitative tools.

Opportunistic provider of liquidity in cases where we can capture value by acquiring attractively-priced odd lots or participate in smaller issues.

In general, we tend to hold fixed income assets through to maturity. However, we can be active traders when required, such as when the creditworthiness of an issuer deteriorates, or yield compression reduces a securities risk-reward proposition to unattractive levels.

Ongoing risk management measures and focuses risk by evaluating portfolios on an ongoing basis.

We identify, hire, and oversee outside managers on behalf of our clients, providing independent assessment of their results.

Our Manager Selection philosophy is that success requires a careful balance of both quantitative data and qualitative considerations. This requires a thorough consideration of a potential manager’s people, philosophy, process, performance and price.

Our work with clients begins with a discovery process to identify and define each client’s investment objective. An investment policy is designed and asset mix weightings are determined in a way that seeks to achieve these specific objectives.

Only after a thorough consideration of each client’s specific objectives do we begin our search.

We receive and monitor ongoing performance data on a broad universe of managers. Those that have established track records are identified for further review. Managers that meet our stringent criteria are available for consideration by our clients.

Search processes can take two forms: a full-length request for proposal process that culminates in manager presentations to the clients at our offices or a short-form search that comes in the form of a thoroughly researched recommendation.

Our firm prepares and makes these recommendations in complete independence, we pass along the cost of these managers transparently in an “open architecture” format. Our sole source of compensation is directly from our clients and so are not incentivized to select a manager for any other reason than merit.

For us, outside manager selection is not an event. Getting our clients the outcomes they desire requires ongoing evaluation to ensure that hired outside managers are delivering on their value proposition.

Managers are selected in combination with other managers, intentionally selecting those that employ different strategies or with special expertise in niche areas. We expect that selected managers will perform differently in different markets and seek to reduce portfolio-level volatility by diversifying managers.