What’s the strategy
The Real Return Bond (Portico) portfolio strategy invests primarily in a select number of high-quality Canadian government real return bond securities where coupon and principal are indexed to inflation. The portfolio invests in bonds that are backed by the federal government.
The portfolio manager pursues a consistent, measured and disciplined approach to capture incremental gains through a multi-factor approach to analyzing interest rates, and yield curves.
This strategy aims to provide investors with a steady flow of interest income while supplying a hedge against the risk that inflation presents to bonds.
Why invest in this portfolio strategy?
Ideal for investors seeking protection from the eroding effect of inflation by investing in a portfolio of real return bonds.
The Real Return Bond (Portico) strategy can offer:
- Protection for long term purchasing power (as coupon and principal amounts vary with the rate of inflation, the portfolio’s returns can help hedge against rising inflation)
- Reduced credit risk through a portfolio of select, high-quality government bond securities held for their relative attractiveness
- Lower interest rate/inflation sensitivity over the longer term than a long-term Canadian government bond portfolio
- A pure Canadian, longer-duration investment to match investors’ long-term liabilities and/or meet longer-term objectives
- A unique opportunity to further diversify a fixed-income portfolio
Typical portfolio characteristics include higher short-term return volatility due to longer duration and changing inflation rate expectations. The portfolio tends to have a lower market yield than the broad Canadian fixed-income market, but in contrast to conventional bonds, it benefits from price appreciation due to increases in Canada’s consumer price index.
Data for institutional investors
Associate Manager, Fixed Income
Alexa is the lead portfolio manager for Portico’s income-focused mandates, Real Return Bond mandates, and the fixed-income components of several of GLC’s balanced mandates. She also assists in the management of the Core Bond mandate.
She has focused on fixed income analysis and management for the company since 2009. Previously, she completed 2 years of asset management training rotations as part of Great-West Life’s Portfolio Management Training program.
Alexa is a CFA charterholder and CAIA charterholder. She also earned an honours bachelor of commerce degree (finance and human resources) from the University of Manitoba.
Benchmark source: Copyright®, FTSE is a trade mark of FTSE International Ltd and is used under license. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); and TSX® is a registered trademark of TSX. Copyright®, MSCI Inc.
Portfolio attributes and rates of return reflect the portfolio strategy used by the London Life segregated fund shelf.
Past performance is no guarantee of future results.
There is no guarantee that investment objectives, or risk or return targets discussed in this material will be achieved. No part of this material may be reproduced or redistributed in any form without express written permission of GLC Asset Management Group Ltd. The data provided is for information purposes only. This material is not intended to be read in isolation and may not provide a full explanation of all the topics that are presented and discussed. Information contained in this material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. Furthermore, there can be no assurance that any trends described in this material will continue or that forecasts will occur; economic and market conditions change frequently. This material should not be considered a recommendation or offer to purchase or sell any particular investment.