Investors looking to best a portfolio made up of government bonds with similar maturities may find the Foundation Yield Fund is just the investment they’ve been looking for. Its specific objective is to provide measurably higher returns than what would be expected from a simple balance of the DEX Universe of Bonds at 85% and a small allocation of dividend paying equity. The performance comparables below illustrate the historic out performance of the chosen basket of ETFs.

Holding primarily a basket of higher income and yield producing investments, the Foundation Yield Fund is expected to reward investors with attractive and sustainable cash flow.

In order to achieve this objective, the manager will implement a quantitative risk and return methodology to determine tactical asset allocation, ensuring that the portfolio always holds the most attractive mix of yield producing vehicles.

While Canadian Government Bond ETFs will make up the greatest portion of the fund, other value-driving assets will include global fixed income, corporate bonds and dividend-paying equity ETFs.

Always on the lookout for interesting ideas to drive performance, the theme portion will enhance the portfolio’s value by holding  a certain percentage of assets in various market themes that are chosen to take advantage of certain market opportunities that relate to specific industries, sector, and sub-sectors. The manager believes this strategy of combining asset allocation with opportunistic sector exposure adds value, pushes upside and compliments the performance of the overall portfolio.

Theme and opportunistic investments will always follow a value investment approach. This means the manager will always seek to find quality investments priced at a measurable discount to their true value. Portfolios dominated by Government bonds typically display lower than expected returns and lower realized asset value fluctuations. However, this fund has the potential to hold a significant amount of assets in non-government fixed income investments.

While this tactic has the potential to elevate returns, it also increases net asset value variability. As such, the Foundation Yield Fund could be suitable for investors with higher income requirements, medium to longer-term investment time horizons and who are comfortable with investments that have a higher risk profile than that of Government of Canada bonds. Investors in this fund should be willing to accept a low to medium level of risk. 

For latest fund performance, click here