With literally thousands of mutual funds available for sale in Canada, tyring to find a fund or mix of funds that will have the potential to deliver strong risk adjusted relative returns can be a very daunting task. Our Recommended List of Funds does a lot of that heavy lifting for you. We have analyzed more than 1500 funds and narrowed the investment universe down to our best ideas. This comprehensive report includes what we feel are the best funds in a wide range of asset classes, includes quick bullet points on the fund and the current environment, and provides ideas on how to put your own portfolios together. This tool is a great way to help reduce the time you spend selecting funds and building portfolios and gives you more time to build and maintain client relationships.
Below, you will find our Recommended List of Funds reports. Subscribers have access to the most current reports, which are updated quarterly. If you would like reports from 2009 or 2010, feel free to email us at info@paterson-associates.ca with your request.
June 2020 Mutual Fund Focus List
PH&N Total Return Bond Fund (RBF 6340 – Front End Units, RBF 4340 – Low Load Units) – With interest rates now at or near record lows and expected to remain there for some time, investors looking for ways to generate returns may have to look outside of your basic government and corporate bond issues. It is that ability to invest in non-core bond fixed income products that makes this an attractive fund.
read moreMutual Fund Focus List – September 2019
Managed by a team headed by veteran manager Mark Wisniewski, this is an actively managed diversified North American-focused bond fund with a flexible mandate allowing the manager to invest across the capital structure. The fund takes an absolute return approach and aims for a 4% to 6% return, net of fees over a rolling three-year period, regardless of interest rates. It is managed using a disciplined investment process blends top-down macro views, thematic tactical trades, and bottom-up security selection. Management has a range of tools at their disposal including the ability to alter interest-rate sensitivity, currency exposure, security mix, and credit quality to either capture potential upside or to reduce or manage risk.
read moreETF Focus List – September 2019
Vanguard Canadian Short-Term Bond Index ETF (TSX: VSB) – This is my top pick for broad-based short-term bond exposure. Despite carrying an MER that is 1 basis point higher than the iShares version (XSB), I prefer it for its higher credit quality and greater exposure to government bonds. I have always viewed short-term fixed income as a safe haven, and with my expectation of higher equity-market volatility in the next few months, I believe this offering will hold up slightly better than XSB.
read moreMutual Fund Focus List – June 2019
Heading into the second quarter, the consensus was that the next moves from global central banks was going to be a hike in interest rates. That changed about two-thirds of the way into the quarter as the friction caused by the trade wars started to have a real impact on the economic numbers, and with no end in sight, created real uncertainty about the future. This caused a complete 180 and the consensus shifted that the next move was going to be a cut by central banks, with the only real debate being how big of a cut. In this environment, we saw yields move lower. In Canada, the yield on the benchmark five year Government of Canada Bond fell from 1.52% to 1.39%, after peaking in mid-April at 1.66%.
read moreETF Focus List – June 2019
. Download a PDF Version of this Report . Additions Horizons Active Corporate Bond ETF (TSX: HAB) – This is an actively managed bond ETF that is run by the fixed income team at Fiera Capital. Fiera is a Montreal based Canadian money manager with more than $144 billion in assets under management. The company offers a wide range of investment strategies from traditional fixed income and equities to alternative strategies and ESG investing. This ETF is managed using a blend of top down macro analysis and bottom up security selection. The process...
read moreMarch 2019 ETF Focus List Review
Last time around, I noted that I continue to favour the Invesco Senior Loan ETF (TSX: BKL.F) for exposure to the leveraged loan space largely on the higher quality portfolio it offers. During an extremely challenging period for credit markets, this ETF held up better than the other floating rate ETFs, gaining 1.10%. This narrowly outpaced the Mackenzie Floating Rate Income ETF. I continue to follow the Mackenzie offering closely and am looking to see how it continues to perform in a challenging environment.
read moreRecommended List of Funds – January 2019
There is little question that floating rate investments can be a great way to help reduce the effects of rising rates in a portfolio, but it is important to note that these are not suitable as a core holding for the fixed income portion of a portfolio. While the reduction of interest rate sensitivity is undeniable, the credit risk is very real. It should be noted that the underlying loans are almost always unrated, and while they are secured by assets, the risks for default still exist. With their near zero duration, many investors make the mistake of thinking these investments are much like a cash substitute. Again, this is not the case as these are often non-investment grade loans that can sometimes fluctuate significantly. In the fourth quarter the average floating rate fund fell by more than 2%. A key reason for this decline was equity market volatility led investors towards traditional safe haven investments such as government bonds which lowered the demand for riskier investments pushing prices lower.
read moreETF Focus List – December 2018
Invesco Senior Loan CAD Hedged ETF (TSX: BKL.F) – Last time around, I noted that I continue to favour this ETF for exposure to the leveraged loan space largely on the higher quality portfolio it offers. During an extremely challenging period for credit markets, this ETF held up better than the other floating rate ETFs, gaining 1.10%. This narrowly outpaced the Mackenzie Floating Rate Income ETF. I continue to follow the Mackenzie offering closely and am looking to see how it continues to perform in a challenging environment.
read moreRecommended List of Funds – October 2018
he past few quarters have been a challenge for bond investors with central banks starting to remove stimulus and moving towards normalizing their interest rate policies. Over the past two years, the FTSE/TMX Canada Universe Bonds Index is lower by an annualized 0.7% to the end of September. The environment is not likely to get any easier in the next little while either, with worries over inflation becoming more real, the yield curve continues to flatten and worries over it inverting remain in view. Further, there are growing concerns over the credit quality of many of the issues in the lowest rated part of the investment grade bond universe. With these challenges, a low-cost passive bond fund, or even a core only product may not be your best option.
read moreETF Focus List – September 2018
There were no new additions or deletions to our ETF Focus List this time around. In this edition, we highlight ETFs from Invesco, Horizons, iShares and Vanguard.
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