Fixed Income

The Fixed Income Advantage

After decades of low interest rates and bond yields, investors have finally entered a new era in fixed income, with the opportunity for increased income and returns.

The Dynamic Fixed Income Advantage

With increased bond market volatility, investors need a manager with the flexibility to respond to rapidly changing conditions. While many fund managers claim to be active, the reality is that many are actually “closet indexers” - charging fees for active management while passively mirroring an index. Unlike closet indexers and passive fund managers, Dynamic's legitimately active portfolio managers have greater flexibility to:

Take advantage of interest rate changes by tactically adjusting duration within a wider range;

Exclude certain sectors, geographies or securities/issues to better manage risk and enhance returns;

Vary holdings to take advantage of opportunities beyond the benchmark; and

Utilize capital market tools – such as options, hedges, futures and short-selling – to better manage volatility and enhance returns.

An Active Approach to Driving Returns

Duration: A Powerful Tool

Duration is a measure of interest-rate sensitivity calculated in years. The higher the value, the greater the impact that interest-rate changes will have on a portfolio's returns. Truly active, Dynamic's portfolio managers have the flexibility to make swift, tactical adjustments within a wide range – raising duration to get the maximum benefit from falling rates and conversely, reducing duration to limit the negative effect of rising interest rates.

An investor who has held the index has seen huge changes over the last three decades with risk (as measured by duration) almost doubling, while yield was slashed by more than three quarters.

Credit Quality: When Due Diligence Matters

Over the last 10 years, the U.S. bond market, and their key indices, have seen a tremendous increase in BBB-rated bonds, which, in terms of credit quality, are ranked just above high-yield (aka junk bonds). The Canadian bond market has experienced the same.

Investing in a passive index may expose investors to any number of unvetted BBB-rated bonds, whereas through deep analysis and due diligence, our active managers select only those credits, which they are comfortable holding. Together, with the support of Dynamic's independent credit research team, active management can help to identify, and potentially avoid, at-risk issuers and limit exposure to negative events, such as the U.S. regional bank crisis of 2023.

Dynamic believes the need for active management has never been greater. Simply tracking an index in the current market environment will likely result in excess risk exposure to changing interest rates and/or credit ratings.

Discover Dynamic Fixed Income Funds

Discover the Equity Advantage

Dynamic’s Portfolio Managers build concentrated, high-conviction portfolios in order to deliver differentiated performance beyond the benchmark.

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Find out why Active Matters

At Dynamic Funds, active management is the cornerstone of our investment process.

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Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in units value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual fund investments are not guaranteed, their values change frequently and past performance may not be repeated.
The information provided is not intended to be investment advice. Investors should consult their own professional advisor for specific investment and/or tax advice tailored to their needs when planning to implement an investment strategy to ensure that individual circumstances are considered properly and action is taken based on the latest available information. To the extent this document contains information or data obtained from third party sources, it is believed to be accurate and reliable as of the date of publication, but 1832 Asset Management L.P. does not guarantee its accuracy or reliability.
Dynamic Funds® and Legitimately Active Management® are registered trademarks of The Bank of Nova Scotia, used under license by, and is a division of, 1832 Asset Management L.P. © Copyright 2024 The Bank of Nova Scotia. All rights reserved.

Daily Price $ 00-00-00				Performance % 00-00-00										Annual Return %					Documents
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Series	NAV	chg $	chg %	1 yr	3 yrs	5 yrs	10 yrs	Incep	Date	1 mo	3 mo	6 mo	YTD	2000	1999	1998	1997	1996

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The Fixed Income Advantage