Conservative income oriented investors have relied for years on GIC’s, Government of Canada Bonds, and dividend paying equities for retirement income and/or conservative growth of capital.  These three asset classes have been used together in varying combinations depending on the risk profile of a client.  

Income trusts over the past ten years may have also been a key element of this strategy, as well as corporate bonds to a limited degree.  

Historically this approach would have predominantly been invested in Canada.  

With interest rates at historic lows, GIC’s and Government of Canada Bonds no longer provide investors with any type of meaningful yields, and the dividend paying sector in Canada is limited.  Due to changes in tax legislation the income trust sector in Canada is disappearing.  

The challenge facing many investors is generating sufficient income without taking on excessive risks…  

Under utilized in most retail investor portfolios are Global Sovereign Bonds.  Similar to equity markets, Canada represents approximately 2% of global fixed income markets.  Quite simply, there is much greater selection outside of Canada for both corporate bonds, and government bonds, as well as countries offering much higher yields compared to Canadian debt.  

Our paid to wait strategy consists of owning a broadly diversified portfolio of select sovereign bonds, corporate bonds (investment grade and high yield), real estate investment trusts (REITs), dividend paying equities, and infrastructure assets.  Examples of infrastructure assets are utilities, ports, and toll highways.  

Our paid to wait strategy targets a 6% yield to the investor net of all fees. 

This approach is designed to take advantage of the most attractive yield opportunities in the world, while maintaining a conservative risk/return profile.  Individual investors gain access to yield producing investments that otherwise would only be available to institutional mandates.  

Income received is tax efficient, currency risks are actively managed, and asset allocation will be adjusted based on market conditions.