Going beyond the ordinary
iA Clarington partners with PineBridge Investments LLC for a new approach to income
For more than 30 years, income-seeking Canadian investors enjoyed what seemed like the best of all worlds. One of the most reliable sources of investment QVKWUM · +IVILQIV OW^MZVUMV\ JWVL[ · ML attractively high yields, as well as price appreciation from steadily falling interest rates. It wasn’t so long ago that Canadian investors earned what by today’s standards are equity-like total returns from investment grade government bonds. Investors today face an altogether new reality: Canadian government bond yields are near historic TW_[ IVL _Q\P QV\MZM[\ ZI\M[ IVL QVÆI\QWV ZQ[QVO \PM[M “It’s a uniquely challenging set of circumstances, and our goal has been to develop solutions that meet the pressing investor need for income in a world where traditional sources may no longer be adequate,” says Eric Frape, Senior Vice-President, Product & Investments, iA Clarington Investments. “This is why we’ve partnered with PineBridge Investments LLC \W 1) +TIZQVO\WV /TWJIT *WVL .]VL IVL IA Clarington Emerging Markets Bond Fund.” Headquartered in New York, PineBridge Investments is an active, high-conviction global asset manager with more than US$85 billion in AUM. 1 One of the key reasons iA Clarington chose PineBridge Investments is \PM ÅZU¼[ KWUXZMPMV[Q^M OTWJIT NWW\XZQV\ _Q\P UWZM than 200 investment professionals in 17 countries. 1 “While it’s possible to manage a global or emerging market bond fund from Toronto or New York, our view is that global investing is enhanced when you have the local knowledge and relationships that PineBridge has spent so many years cultivating,” says Frape. “Our local presence provides language, relationship and cultural advantages, as well as the opportunity for meaningful information exchange across teams,” [Ia[ 5QKPIMT 2 3MTTa 5IVIOQVO ,QZMK\WZ IVL /TWJIT Head of Multi-Asset, PineBridge Investments. “We believe the breadth and depth of our global reach is unparalleled in asset management.”
Focus on fi`ed income
PineBridge’s expertise covers the full spectrum of asset KTI[[M[ NZWU MY]Q\QM[ \W Å`ML QVKWUM \W IT\MZVI\Q^M QV^M[\UMV\[ <PM ÅZU PI[ LMMX JMVKP [\ZMVO\P QV OTWJIT IVL MUMZOQVO UIZSM\ Å`ML QVKWUM _Q\P UWZM \PIV =; JQTTQWV WN \PM ÅZU¼[ )=51 and 87 of its investment professionals1 focused on delivering innovative income solutions to both institutional and retail clients. *W\P 1) +TIZQVO\WV /TWJIT *WVL .]VL IVL 1) Clarington Emerging Markets Bond Fund are managed using a dynamic, research-intensive investment process that combines top-down2 macroeconomic analysis with bottom-up2 credit analysis.
IA Clarington Global Bond Fund
<PM 1) +TIZQVO\WV /TWJIT *WVL .]VL [ IKKM[[ \W \PM MV\QZM OTWJIT Å`ML QVKWUM ]VQ^MZ[M _PQKP \ZIV[TI\M[ into potential for higher yields and reduced exposure to interest rate risk. 2 “We use an unconstrained approach, which means there is no minimum or maximum allocation for any region or asset class,” says Kelly. “Our allocations are driven by what our rigorous process suggests are the regions, asset classes and individual securities most likely to bring investors the best outcomes.” The Fund’s investment strategy is based on an intermediate time horizon. “We believe that an approach that’s exclusively strategic or tactical is not optimized to meet investor needs,” says Steven Oh, 5IVIOQVO ,QZMK\WZ /TWJIT 0MIL WN +ZMLQ\ IVL .Q`ML Income and Co-Head of Leveraged Finance, PineBridge Investments. “A purely tactical time horizon – one to three months – is too short for prices to converge with fundamentals, 2 while a purely strategic approach of 10+ years asks investors to tolerate too many down markets in search of a long-term result. We believe a nine- to 18-month time horizon is long enough for prices and fundamentals to converge and also matches most client needs and objectives.”
IA Clarington Emerging Markets Bond Fund
The IA Clarington Emerging Markets Bond Fund aims to provide investors with the optimal allocation \W \PM \PZMM UIQV MUMZOQVO UIZSM\ Å`ML QVKWUM asset classes: hard currency sovereign bonds, 2 local currency sovereign bonds2 and corporate bonds. 2 “Emerging market debt represents a US$16-trillion opportunity that spans more than 70 countries,” says Anders Faergemann, Managing Director, Senior Sovereign Portfolio Manager for Emerging Markets Fixed Income, PineBridge Investments. “For investors seeking potential for enhanced income streams, an actively managed, risk-conscious portfolio of emerging market debt is an excellent solution.” Emerging market debt is particularly attractive in the current environment of U.S. Federal Reserve monetary policy normalization. 2 “Our research has shown that when the Fed raises interest rates gradually, emerging UIZSM\ LMJ\ \MVL[ \W W]\XMZNWZU W\PMZ Å`ML QVKWUM asset classes,” says Faergemann.
Emerging market debt outperforms amid Fed rate hikes