Canoe Global Income Fund is a “go-anywhere” fixed-income fund that can invest anywhere in the world,
in any type of fixed-income investment, right across the credit spectrum.
It can invest up to 25% in high-yield issues, and must have a minimum of
30% in bonds rated A or better.
The fund management team is led by by
Brian Westhoff, and relies additionally on the expertise of more than 40 investment
professionals. The team uses an investment process that is a mix of
top-down macro analysis combined with bottom-up security selection.
Top-down analysis helps the team identify the most attractive areas of the
fixed-income spectrum, while the bottom-up process considers many factors,
including fundamental and technical metrics.
The managers are very active in their approach and will adjust the
portfolio based on the outlook and relative valuation. Their goal is to be
very well diversified across different sources of alpha. Accordingly, as of
the end of April (the most recent data available), the portfolio was 57% in
corporate bonds and 17% in asset-backed securities, 11% in government
instruments, and 11% in mortgage-backed securities. About 90% fund’s
holdings were rated investment-grade, with the remainder in high yield.
Geographically, 78% was invested in the U.S. Almost all the foreign
currency exposure is hedged.
Performance has lagged recently, with a 3-year average annual compounded
rate of return of 1.2% to May 31, which puts it middle of the pack for the
Global Fixed Income category. However, volatility has been well below the
index and peer group, with a 3-year average standard deviation of 2.1%. The
managers have done an excellent job protecting capital, participating in
less than 10% of the downside of its benchmark
Looking ahead, I would expect the fund to continue to deliver stable,
consistent returns, when compared with its peer group. This may not be the
best-performing fund on an absolute basis, but when you factor in the low
or modest volatility, I expect it to be near the top on a risk-adjusted
Canoe Global Income Fund
Canoe Financial LP
Global Fixed Income
Top-down macro; bottom-up security selection
Brian Westhoff since Aug 2013; Brad Doyle since August 2013
GOC7001 (Front-end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
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amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.