| Fund Company | CIBC Asset Management |
| Fund Type | Canadian Fixed Income Balanced |
| Rating | B |
| Style | Blend |
| Risk Level | Low – Medium |
| Load Status | Optional |
| Manager | CIBC Global Asset Management Team |
| MER | 1.92% |
| Code | ATL 048 – Front End Units ATL 050 – DSC Units |
| Minimum Investment | $500 |
Analysis: Despite being made up of a mix of middle of the road funds, this is a portfolio that really punches above its weight, offering investors decent risk adjusted returns and cash flow all at a reasonable price.
The portfolio is a fairly static mix of a number of Renaissance offered funds. The target asset mix is set at 30% Renaissance Canadian Bond Fund, 25% Renaissance Canadian Dividend Fund, 15% Renaissance Global Infrastructure Fund, 15% Renaissance High Yield Bond Fund, 10% Renaissance Global Bond Fund, and 5% Renaissance Real Return Bond Fund. This mix stays pretty consistent over time, with portfolio turnover averaging about 3% a year for the past five years.
Launched in late 2007, the timing for this fund couldn’t have been worse. Still, its performance numbers have been very respectable. For the five years ending June 30, it gain an annualized 4.1% per year, just lagging its benchmark. The one and three year numbers are even more impressive, with a one year gain that outpaced its index by more than 350 basis points. The fund has posted modest levels of volatility and offers strong downside protection with modest upside participation. In other words, while you will lose money in this fund when the markets are down, on average, you can expect to lose much less, without sacrificing a lot of the upside.
It also pays a monthly distribution that is currently set at $0.033 per unit. At current prices, this works out to an annualized yield of around 4%. If you are looking for more cash flow, there are T-6 and T-8 versions available that offer yields of 6% and 8% respectively. A word of caution with the higher cash flow is that you will likely experience erosion of your capital if returns don’t exceed the payout. That’s not necessarily a bad thing depending on your circumstances, but it is something you need to be aware of.
Looking ahead, I expect with the interest rate sensitivity in both the fixed income and equity portions of the portfolio that it will be difficult to deliver the levels of absolute returns that it has in the past. Still, I do expect that it has the potential to continue to deliver attractive relative returns.
It is a well diversified portfolio with a very reasonable cost. All in all, this is a fund you may want to consider if you are looking for a diversified portfolio that will deliver modest risk adjusted returns and good cash flow.