CI Investments launches floating-rate income pool
CI FINANCIAL Corp.’s CI Investments Inc. is providing a new option for income investors concerned about rising interest rates with the launch of Signature Floating Rate Income Pool.
The pool invests in a conservative, actively managed global portfolio of floating-rate bonds and leveraged loans, as well as shorter-term high-yield and investment-grade bonds, which are less sensitive to changes in interest rates compared with other fixed-income securities. The pool provides an income stream through a monthly distribution.
The launch of the fund is timely, as the U.S. Federal Reserve has increased its benchmark rate twice in 2017, with additional hikes expected. Meanwhile, Bank of Canada announced a rate increase of 0.25 per cent on July 12, and raised the possibility of further increases this year.
“When interest rates are rising, investors are concerned about preserving capital and balancing risk within their fixed-income portfolios,” said Geof Marshall, senior vice-president, Signature Global Asset Management, portfolio manager of the new pool. “Signature Floating Rate Income Pool is designed to diversify fixed-income portfolios and provide protection against increases in interest rates.”
Signature Global Asset Management, a division of CI Investments, manages over $53-billion in assets, including a diverse lineup of income mandates. Signature Floating Rate Income Pool will benefit from Signature’s expertise in managing high-yield, investment-grade and government bonds, preferred shares, and other income securities. Within the floating-rate space, Signature currently manages over $800-million in senior secured loans and over $1-billion of floating-rate preferred shares. The pool is actively managed in security selection, allocation to income asset classes and currency exposure, with the goal of enhancing risk-adjusted returns.
The lead portfolio managers are Geof Marshall, CFA, who leads Signature’s credit team, and Darren Arrowsmith, CFA, who has over 13 years of experience investing in floating-rate instruments.
“CI offers a wide range of mandates to meet Canadians’ continued need for reliable income and capital preservation,” said Neal Kerr, executive vice-president, investment management, CI Investments. “Signature Floating Rate Income Pool adds to the diversity of our lineup and provides investors with a choice of another high-quality income solution, managed by one of Canada’s largest investment teams.”
Meanwhile, the risk ratings of both Harbour Global Growth & Income Corporate Class and Marret Strategic Yield Fund have been changed from low to medium to medium. These changes will be effective on or about July 27, 2017. The changes are based on the new methodology mandated by the Canadian Securities Administrators to determine the risk level of mutual funds, and are not a result of any changes to the investment objectives, strategies or management of the funds.
Also, in addition to Cambridge Global Asset Management, Epoch Investment Partners and Picton Mahoney Asset Management, the Mackenzie Ivy team will manage a portion of the portfolios of Select U.S. Equity Managed Fund and Select U.S. Equity Managed Corporate Class. The Ivy team’s appointment as subadviser to the two multimanager funds is effective on or about July 17, 2017.
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