Download 9 BMO Guardian Global High Yield Bond Fund Advisor Series

BMO Guardian
Global High Yield Bond Fund
Advisor Series
Tactical appeal of high yield
Global range of opportunities
Active Management by PIMCO Canada Corp.
BMO Guardian Global High Yield Bond Fund Advisor Series
The tactical appeal of high yield
Investors want equity-like returns without equity volatility
Enter high yield investments
Potential for:
1. Higher returns than traditional fixed income
2. Less risk than equities
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BMO Guardian Global High Yield Bond Fund Advisor Series
High yield bonds
Superior risk-adjusted returns
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BMO Guardian Global High Yield Bond Fund Advisor Series
High yield bonds
Favourable correlations
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BMO Guardian Global High Yield Bond Fund Advisor Series
High yield bonds
Strong risk-adjusted returns
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BMO Guardian Global High Yield Bond Fund Advisor Series
High yield bonds
Strong during early stages of recovery
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BMO Guardian Global High Yield Bond Fund Advisor Series
Why high yield now?
Attractive spreads
Versus investment-grade bonds
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BMO Guardian Global High Yield Bond Fund Advisor Series
Why high yield now?
Attractive along quality curve
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BMO Guardian Global High Yield Bond Fund Advisor Series
Limited high yield options
in Canada
Canadian investors need global high yield for two
diversification reasons:
1. Limited number of opportunities
• Many investors chasing
2. Limited range of opportunities
• Concentrated in issues from income trusts and
Canadian banks*
*DBRS Canada Newsletter, Volume 2, Issue 9, March 3, 2010.
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BMO Guardian Global High Yield Bond Fund Advisor Series
Canadian investors
missing out
Global markets – multitude and
range of issues across many
countries:
•Investment-grade corporate bonds
•Emerging-market corporate bonds
•Sovereign credits
•Non-core credit sectors
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BMO Guardian Global High Yield Bond Fund Advisor Series
What about high-yield risk?
The new normal
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High yield ≠ high risk
Many emerging-market
countries carry lower debt levels
than developed countries and
some major corporations
Some emerging-market
businesses – very clean
balance sheets
Prospect of higher economic
growth – likely to lead to
sustainable higher yields
“When you have some
countries with better balance
sheets than many well-known
corporations, you need to readjust your assessment of risk
to the new normal.”
-Curtis Mewbourne,
Executive VP and Portfolio
Manager, PIMCO
BMO Guardian Global High Yield Bond Fund Advisor Series
Risk/return comparisons
Credits vs. equities
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BMO Guardian Global High Yield Bond Fund Advisor Series
Not all high yield bond funds
are equal
Experienced security selection is key
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BMO Guardian Global High Yield Bond Fund Advisor Series
5 Reasons to pick BMO Guardian
Global High Yield Bond Fund Advisor Series
1. Open investing and managers around the globe
2. Active and holistic
• Top-down economic view, bottom-up security
analysis and selection
3. Four-point investment process
4. Embedded hedge currencies
5. PIMCO Canada – Access to expert and largest pool of
fixed-income managers in the world
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BMO Guardian Global High Yield Bond Fund Advisor Series
1. Open Investing
Finding opportunities around globe
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2.
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Investment-grade global corporate bonds
Emerging-market corporate bonds
Sovereign credits
Non-core credit securities
BMO Guardian Global High Yield Bond Fund Advisor Series
2. Active and holistic
Top-down economic view
Bottom-up security analysis and selection
1. Strategic exposure across a broad array of global
credit markets and credit selection
2. Bottom-up active management analyzing and
selecting individual securities
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BMO Guardian Global High Yield Bond Fund Advisor Series
3. Four-Point investment process
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2.
3.
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Outlook: interest rates and
macroeconomics
View on Country: interest
rates, credit trends and
economic conditions
Portfolio targets: sector,
quality, weightings
Portfolio construction:
individual security analysis
and selection, risk controls
and liquidity
BMO Guardian Global High Yield Bond Fund Advisor Series
4. Embedded hedge currencies
1. Not all bond funds offer currency hedging
2. Most currencies fluctuating
3. Skilful hedging reduces volatility – can result in
steadier returns
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BMO Guardian Global High Yield Bond Fund Advisor Series
5. PIMCO (Parent of PIMCO Canada Inc.)
PIMCO Fixed Income Manager of Decade*
1. As large as Canada’s GDP,
PIMCO manages more than
US$1 trillion
2. 450 investment professionals
around the globe and in
Canada
3. 30 years of managing money
4. Low default rate
*According to Morningstar
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BMO Guardian Global High Yield Bond Fund Advisor Series
Guarding against risk
Diversification
•Global
1. More selection and range – developed and emerging markets
•Blended portfolio – developed, emerging, corporate, sovereign, other
core and non-core credit sectors
Active and holistic
•Top-down view and bottom-up security selection
Embedded currency hedging – against fluctuations
Income specialists
•Expert and largest fixed-income managers in the world
Close monitoring – lower defaults than benchmarks for past 16 years
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BMO Guardian Global High Yield Bond Fund Advisor Series
At the helm
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Curtis A. Mewbourne
Managing director, head of
portfolio management for
PIMCO's New York office
Generalist portfolio manager –
manages institutional accounts
and mutual funds across a wide
range of strategies
18 years of trading and portfolio
management experience
Curtis A. Mewbourne
Executive VP and Portfolio Manager
BMO Guardian Global High Yield Bond Fund Advisor Series
Disclaimers
®Registered trade-mark of Bank of Montreal, used under licence.
For information only. The information contained herein is not, and should not be construed as
investment advice to any party. Investments should be evaluated relative to the individual’s investment
objectives and professional advice should be obtained with respect to any circumstance.
BMO Guardian Funds refers to certain mutual funds and/or series of mutual funds offered by BMO
Investments Inc., a financial services firm and a separate legal entity from Bank of Montreal.
Commissions, trailing commissions, management fees and expenses all may be associated with
mutual fund investments. Please read the prospectus of the mutual fund before investing, their values
change frequently and past performance may not be repeated.
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