KJH Credit Fund
What is the investment objective of the KJH Credit Fund?
The investment objective of the KJH Credit Fund is to seek maximum risk-adjusted returns while preserving capital, utilizing diversified investment strategies that focus on primarily Canadian investment grade corporate fixed-income securities. The strategies are intended to mitigate the impact of market corrections and to deliver returns based on the Manager’s expertise in evaluating credit markets.
What does the KJH Credit Fund invest in?
The Fund attempts to add value predominantly through the use of three strategies in the fixed income market:
- Investment primarily in a portfolio of Canadian high quality, liquid bonds; hedge interest rate risk; earn the interest rate spread between corporate bonds and government bonds and apply a prudent amount of leverage to amplify returns.
- Invest in new fixed-income issuances, which typically appreciate in value after initial distribution.
- Exploit trading opportunities where securities are temporarily mispriced.
The vast majority of the bonds that the fund invests in are less than 2 years in duration and rated in the A-BBB range. Given the makeup of the Canadian bond market, the majority of these bonds end up originating from the financial sector.
Why this asset mix?
With traditional fixed income instruments such as government bonds, municipal bonds, blue chip corporate bonds, and GIC’s all earning negative real rates of return (meaning they are not keeping pace with inflation), any credit fund needs to add value through the use of smart, creative solutions and industry expertise. Through a combination of sound fundamental analysis and a keen understanding of bond market technical factors, the KJH Credit Fund has proven to add value for clients.
What is the role of the KJH Credit Fund in your portfolio?
This Fund is intended to exhibit little to no correlation with broad equity or fixed income markets, and to be able to earn a positive return in any market condition. Through expert security selection, the prudent management and application of leverage, and access to the latest deal flow, the KJH Credit Fund provides a unique combination of protection of capital with the opportunity for growth.