Managed by Paul Sandhu of Marret Asset Management, this is a global bond
fund that affords the managers a lot of flexibility. With its global
mandate, the fund can invest in Canadian, U.S., and European corporate
Mr. Sandhu builds a core portfolio using a combination of top-down macro
analysis combined with fundamental, bottom-up security selection. Once the
portfolio is set, he then uses an overlay strategy to tactically hedge
three key risks: interest rate risk; credit risk; and currency risk.
To hedge interest rate risk, the Mr. Sandhu can tactically short government
bonds and interest rate futures, while credit risk is hedged through the
use of credit default indexes.
In addition, he will actively trade the portfolio, looking to take
advantage of short-term opportunities.
At the end of December, the fund held 47% of assets in Canadian corporate
bonds, 19% in foreign credit, 16% in foreign government bonds, 9% in
Canadian government bonds, and the remainder in cash.
Performance has been very strong. The 3-year average annual compounded rate
of return ending Oct. 31 was 2.1% compared with the FTSE/TMX Canada
Universe Bond Index return of 1.5%.
At an 3-year average standard deviation of 2.6%, Volatility has been well
below the index and the peer group, resulting in above-average risk
With credit spreads tight around the world, and interest rates becoming
increasingly volatile, you need a bond fund that is actively managed. The
CI Investment Grade Bond Fund is certainly one worth taking a look at.
If you prefer an ETF structure, a substantially similar mandate is
available in the
First Asset Investment Grade Bond ETF (TSX: FIG).
CI Investment Grade Bond Fund
Global Fixed Income
FundGrade A+ Award:
Top-down macro/Bottom-up security selection
Paul Sandhu since Dec. 2014
CIG2185 (Front-end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
Notes and Disclaimer
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before investing. Mutual funds are not guaranteed and are not covered by
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its net asset value per security at a constant amount or that the full
amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.