Investors Must Remain Vigilant


    Returns from fixed income will come if investors remain vigilant in this low interest environment, says Christine Horoyski, senior vice-president and portfolio manager, fixed income, Aurion Capital Management. In the session ‘Active Fixed Income Management: Extracting Value in a Low Interest Rate Environment’ at the Strategy Institute’s ‘11th Annual Foundation, Endowment & Not For Profit Investment Summit,’ she said yields will not rise significantly this year so investors need to look for ways to add value and manage risk. The outlook last year was to be careful. This year, she said, they are cautious, but the environment is starting to improve. To add return, investors need to seek value added opportunities and maintain control over the risks in their portfolio. One solution is active fixed income management, but active fixed income managers need to look different than the index. She said this can be done by using active duration management, getting paid for risk when credit risk is taken, and looking for value added opportunities. As well, because Canada is so concentrated, investors should look south of the border and across the pond where there is lots of opportunity.