The fund’s main objective is to generate income without taking on excessive
risk. As such, it has avoided growth-focused sectors such as technology and
high-flying consumer names. But because these have been key market drivers
through 2017 and much of 2018, this fund’s performance has lagged.
Contributing to that lag was the fund’s high exposure to the energy sector,
which suffered from rising rates and general lack of interest in energy in
general. And with the fund’s higher level of interest rate sensitivity in
the equity sleeve, rising rates have created an additional headwind to
So where do we go from here? Despite the recent underperformance, this
remains an excellent fund. Managed by Eric Bushell and the Signature Global
Asset Management team, the fund has a tactical mandate and can invest
anywhere in the world. The approach is somewhat style-agnostic, involving
an analysis of a company’s entire capital structure, as well as the many
qualitative aspects of the company, such as management, disclosure, and
governance. This gives the fund its opportunistic slant, allowing it to buy
the most attractive part of a company.
At the end of December, the portfolio was allocated 32% to fixed income,
21% to U.S. equity, 14% to Canadian equity, 11% income trusts, 9%
international equity, and the balance in cash.
The fund pays a monthly distribution of $0.07, for an annualized
distribution yield of 6.6%. My concern is that we may see a cut to the
distribution if performance doesn’t pick up; otherwise, there will be a
continued erosion of net asset value, as the fund pays out more than it
Still, I expect the fund to continue delivering modest returns, with low
volatility, resulting in very decent risk-adjusted returns for investors.
In addition, I expect the fund to hold up better than many of its
“growthier” peers in periods of heightened volatility.
CI Signature High Income Fund
Global Neutral Balanced
FundGrade A+ Awards:
2012, 2013, 2015
Geof Marshall since Dec. 2010; Eric Bushell since March 2016
CIG686 (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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only and is not intended as personalized investment advice.