Approach

Our approach is focused on the preservation of capital through extensive and rigorous investment analysis on a position and portfolio basis.

>Benchmarked to a broader index

>Inability to isolate corporate credit exposure

>Large pooled products limit the manager’s ability to adapt to changing market conditions

>Restrictive mandates limit ability to adequately hedge portfolio risks

>Narrow mandate and large institutional assets under administration restricts access to opportunities

>Ability to be proactive and opportunistic in volatile or changing market conditions

>Experience isolating opportunities and hedging unwanted risks

>Flexible mandates take advantage of a broad scope of market inefficiencies and opportunities

>Low volatility strategy of emphasizing securities with attractive coupons while managing duration

>Invest where credit events such as asset sales and equity raises may result in credit rating upgrades

>Short sell credit downgrade candidates with deteriorating corporate fundamentals and/or over-leveraging

Why invest in Goodwood's Fixed Income Solutions Now?

Central Banks in G7 countries have embarked on a rate increase cycle in an attempt to tighten financial conditions and control inflation
In our view, the invasion of Ukraine will slow economic growth to the extent that the number of rate hikes may not be as high as previous forecasts
In this environment, we believe bonds are appropriate holdings, however, portfolios should comprise Floating Rate Notes and very short-term corporates
Although interest rates have risen, we have seen sharp downturn indicators in many forward-looking sentiment measures, as such, we are actively monitoring the situation and will take advantage of market dislocations should we see a reversal in the market’s expectations on future interest rates
Recent central bank decisions make the bond market considerably more attractive from a total return perspective in our opinion

Identify attractive high coupon corporate bonds with potential capital gains from credit rating upgrades, deleveraging, improving earnings and asset sales. Corporate bond coupons are 200-400% above equal term Canada’s

25+ year history of fundamental, bottom-up analysis of individual companies with predictable businesses. We use a value approach of investing and avoid companies that are sensitive to factors beyond management control

The investment-grade bond mandate is active, nimble, and capitalizes on market inefficiencies created by the structure of the over-the-counter bond market

Investment-grade portfolios are predominately Canadian companies. We expect Canadian issuers in the bond portfolio to be at a 90% minimum

Predominately higher coupon, shorter maturity, corporate bonds resulting in a lower duration exposure. Our macro assessment on interest rate direction and curve positioning form only part of our investment process