Opportunity
Many investors need a well-run fund offering preservation of capital along with meaningful tax-advantaged yield distributions. Norrep High Yield invests primarily in high yield corporate bonds and floating-rate senior loans to provide a reliable stream of monthly cash distributions. In addition, investors benefit from the security of the return of the invested capital at bond maturity. As a fund within Norrep's corporate class structure, investors may easily switch to and from this fund without incurring a taxable event.
In regards to capital preservation, bonds and senior loans rank higher on the corporate capital structure than preferred and common equity and therefore enjoy a stronger claim on the underlying assets of the company. The portfolio manager's access to high yield bond and senior loan markets allows investors to tap into this inefficient market to realize capital gains over and above the stable monthly yield.
Strategy
We strive to maximize investors’ total return with a combination of income and capital gains. Using complementary top-down and bottom-up processes, we develop key themes and assess market risk while performing in-depth fundamental analysis on sectors and individual securities. In-depth knowledge of the North American credit markets translates into attractive investing opportunities.
To improve investors' after-tax yield by reducing the tax payable, Norrep High Yield may utilize a forward structure. As such, this fund is best suited to non-registered investment accounts and is not suitable for RRSP accounts.
The Norrep advantage
Niche expertise: Hesperian’s investment management group excels at identifying undervalued securities with significant growth potential. Our track record has shown that favourable investment outcomes can be achieved through our proven and repeatable investment methodology.
Independent insight: Our investment management group has a deep roster of experienced professionals that allows the portfolio managers to objectively view an investment's merits in making informed decisions. We choose to know a lot about niches like high yield bonds and senior loans, rather than a little about everything.
Unique access to fixed income markets: Fund investors benefit from business relationships built over time that keep the portfolio management team well informed on the state of the market for high yield securities and fixed income in general.
Focus and discipline: We invest in securities with long-term growth potential and often hold our top ideas for long periods of time to realize the benefits of a concentrated portfolio consisting of the portfolio manager's best ideas.