CC&L High Yield Bond

Investment Objective

• Seeks to provide income and the opportunity for capital appreciation over the longer term by investing primarily in high-yield bonds or other income producing securities.
• Generate returns equal to the return of the benchmark plus 1.25% per annum over a market cycle.
• The benchmark will be comprised of the following: 30% Bank of America Merrill Lynch BB US High Yield Index, 30% Bank of America Merrill Lynch BB US High Yield Index (hedged CAD), 30% FTSE Canada Corporate BBB Bond Index and 10% Bank of America Merrill Lynch BB-B Canada High Yield Index.

Highlights

• Higher yield than traditional fixed income strategies.
• Suitable for de-risking strategies i.e. as an alternative to equity.
• Equity-like returns with lower volatility than equities.
• ESG considerations integrated into the strategy.

Investment Philosophy

• Economic fundamentals drive markets.
• Inefficiencies in the high yield bond market create opportunities to add value through active management.
• Detailed fundamental research and prudent security selection can lead to attractive risk adjusted returns.

Investment Process

• Credit research: Detailed credit research is used to identify undiscovered opportunities in the high yield debt market.
• Investment criteria: Emphasis is placed on issuers with strong asset coverage, unique business model, sustainable competitive advantage or a compelling restructuring plan. Insights from CC&L’s fundamental equity team supplement fixed income research. 
• Proprietary corporate security selection: Each company is assigned a company total return forecast based on bottom-up factors including, but not limited to, a company’s operating profile, quality and incentives of management, and financial profile.
• Concentrated portfolio: Portfolio is focused on highest conviction investment opportunities.

Portfolio Construction & Risk Management

• Investment decisions are implemented within a rigorous risk management framework.
• Risk exposures are identified and considered at both security and total portfolio levels.
• Dedicated trading experts are solely focused on identifying the best implementation strategy. 
• Robust controls measure and monitor active risk for every client, every day.