In recent weeks, we’ve released some articles relating to asset allocation and the implications of the current economic and global uncertainty on that aspect of portfolio construction. Portfolio managers must often adapt to economic conditions and company valuations. One of our leading examples of this can be found in the Mackenzie Strategic Income Fund. What makes this fund unique compared to other similar income funds is the reduced restrictions on shifting asset allocation. The freedom to allocate as much as 30-70% in equities or fixed income means this fund often outperforms the other income funds. Below is a comparison between the Mac Strategic Income Fund and two other Monthly Income portfolios along with the rates of return achieved by each:
- Monthly Income Balanced: 40-60% equity, 35-60% fixed income; Best = 5.7%, Worst = -4.3%
- Monthly Income Conservative: 10-40% equity, 55-90% fixed income; Best = 4.7%, Worst = -2.5%
- Strategic Income: 30-70% equity, 30-70% fixed income; 15.1%, Worst = -6.0%
Our partners at Mackenzie have put together a comprehensive commentary outlining how they have set up the Strategic Income fund to make proactive adjustments by the portfolio managers to reach the return desired by investors, and to lower the overall risk.
Max Leveillee, Associate
& Your CH Financial Team