Investment Solutions

Fixed Income

Barrantagh Fixed Income Strategy

Barrantagh’s fixed income strategy is an active core approach which combines longer-term government bonds with shorter-term corporate bonds to manage risk by means of a “credit barbell” approach. Consistent with our equity investment approach, underpriced shorter-term corporate bonds are identified through fundamental research. All bonds are investment grade with a minimum credit rating of BBB. Government bonds enhance liquidity and permit term management and tactical duration shifts. Corporate bonds provide additional yield and value opportunities amongst bonds with similar credit quality and term to maturity. Corporate bonds also facilitate an active credit sector management strategy.

Fixed Income Strategy

  • Fundamental active core approach
  • Active duration and yield curve strategies
    • Duration +/- 2 yrs from Canadian universe
  • Active management of corporate exposure
  • Corporate credit research – minimum BBB rated bonds
  • Multi-layered risk controls across all key parameters
    • Duration
    • Yield curve (short-mid-long sectors)
    • Corporate exposure
    • BBB exposure

Active Corporate Bond Exposure

Active Sector Strategy

The fixed income strategy actively manages the exposure to corporate bonds based on the prevailing yield premia of corporate bonds vs. government bonds in the market. When the reward or higher yield does not adequately compensate for the higher risk of corporate bonds, exposure is reduced in favour of government issues. Historically, corporate bond exposure has ranged from highs of just over 80% to lows of 30% of the total bond portfolio.