Matco Fixed Income Fund (Series F)
Fund Documents [LINK]    Fund Codes [LINK]    As at September 30, 2020  

Investment Profile
The Fund invests in Canadian investment grade government and corporate bonds to generate interest income and modest capital appreciation.

Fund Inception Date

2017

Fund Net Asset Value

$117 Million

Portfolio Manager

Trevor Galon, CFA

Yield

Current Yield 2.4%
Yield to Maturity 1.3%

Is this fund for you?

You are seeking income, stability and capital preservation

You have a low tolerance for risk on your investment

You are looking to hold the investment for the short, medium or long term

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Geographic Profile

Canadian-focused
The fund invests primarily in Canadian dollar-denominated bonds issued by governments and corporations. The Fund may invest in up to 20% in U.S. corporate bonds.

Strategy

To preserve capital and generate income, the Fund uses a multi strategy approach to optimize the portfolio.

Investor Education

  • Learn about Matco and our investment philosophy
  • Understand this Fund is not intended to be a complete investment program for all investors

 

Performance (Series F)

As at September 30    
Annualized
Net of Fees 3M YTD 1Y 3Y 5Y 7Y 10Y Inception
Series F 0.4% 7.4% 6.2% 4.5% - - - 4.5%

 

Growth of $10,000 since inception

Cumulative Returns

  3M YTD 1Y 3Y 5Y 7Y 10Y Inception
Series F 0.4% 7.4% 6.2% 14.2% - - - 14.3%

 

  • Calendar Year Returns

      2019 2018 2017
    Series F 4.2% 0.7% 1.3%
  • Annual Distribution per Unit ($/unit)

      2019 2018 2017 2016 2015
    Income 0.18 0.16 0.06 - -
    Capital Gains - - - - -
    Total Distributions: 0.18 0.16 0.06 - -

Sector Allocation

Asset Mix

Top Holdings

Canadian Government 3.50% 01DEC45 9.1%
Province of Alberta 2.90% 01DEC28 7.5%
Dollarama Inc. 3.55% 06NOV23 6.8%
Bank of Montreal 2.37% 03FEB25 5.8%
Canadian Government Bond 1.25% 01MAR25 5.5%
Hydro One Inc. 5.36% 20MAY36 5.4%
Canadian Government Bond  2.25% 01JUN29 5.0%
Canadian Government Bond 1.50% 01JUN26 5.0%
Province of Alberta 3.45% 01DEC43 5.0%
Province of British Columbia 2.55% 18JUN17 4.8%

Outlook

North American central banks, the Bank of Canada and the U.S. Federal Reserve have clearly laid out their intentions for the next 24 months. They have explicitly indicated that they intend to leave their overnight interest rates at their current levels, 0.25%, until 2023. These actions and communications are intended to provide the capital markets with the certainty that low-interest rates will continue to support economic recovery. Taking it a step further, both central banks are in the process of purchasing securities in the open market, namely government and corporate bonds. This action is also to serve as a line of support for both the economy and markets. Lastly, the U.S. Federal Reserve has indicated that they will be targeting the long-term average rate of inflation going forward, as opposed to simply targeting 2% inflation at a point in time. So what does this all mean for the bond market? The implications are three-fold. First and foremost, one should anticipate short-term interest rates to remain low through 2021, at the very least. Secondly, although corporate bond spreads have recovered significantly, they should remain relatively stable given both central banks are directly supporting them through their purchase of corporate bonds in the open market. Third, with central banks now focusing on long-term average inflation, when interest rates do eventually begin to drift higher, it is likely longer-term bonds will do so first. Overall, this lends to a stable but modest return outlook for the fixed income market in Canada. Within our Matco Fixed Income Fund, we continue to adjust our portfolio positioning to maintain a healthy level of income while avoiding unnecessary risk.

Performance returns for the Matco Mutual Funds are calculated by Matco Financial Inc. These returns are calculated and reported in Canadian dollars and are historical simple returns for the 3 month, YTD and 1 year periods and annualized compounded total returns for periods after 1 year. They include changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. A cumulative return on an investment is the aggregate amount that the investment has gained or lost over time, independent of the amount of time involved, expressed as a percentage. Calendar year return reflects the compound rate of return over the specified calendar year (January 1st to December 31st). Matco Fund returns are calculated after management fees and operating expenses have been deducted.