Alt Thinking November 30, 2023
Commentary
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Ninepoint Fixed Income Strategy

Ninepoint Fixed Income Strategy - November 2023
Investment Team
  • Mark Wisniewski
    Partner, Senior Portfolio Manager
    Mark Wisniewski
    Partner, Senior Portfolio Manager
    Mark Wisniewski is Partner and Senior Portfolio Manager at Ninepoint Partners and oversees the firm’s Fixed Income team and investment strategies. Prior to Ninepoint’s formation, Mark was with Sprott Asset Management (SAM) from 2015, rounding out more than 30 years of investment industry experience, specializing in fixed income. Prior to SAM, Mark was a Portfolio Manager specializing in alternative credit products at GluskinSheff & Associates, where he managed $1.3 billion across several...
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  • Etienne Bordeleau-Labrecque, MBA, CFA
    Vice President, Portfolio Manager
    Etienne Bordeleau-Labrecque, MBA, CFA
    Vice President, Portfolio Manager
    Etienne Bordeleau-Labrecque is Vice President, Portfolio Manager at Ninepoint Partners. With over 10 years of expertise across equities, interest rates and credit, he now focuses primarily on the firm’s Fixed Income franchise. Prior to Ninepoint’s formation, Etienne was with Sprott Asset Management (SAM) from 2012, where he worked as an Analyst and Associate Portfolio Manager, covering North American equities in the financial, energy, utility and health care sectors. From 2008 to 2011, Étienn...
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  • Nick Warwick, MBA, CFA
    Associate Portfolio Manager
    Nick Warwick, MBA, CFA
    Associate Portfolio Manager
    Nick Warwick is an Associate Portfolio Manager at Ninepoint Partners. Prior to Ninepoint, Nick was with TD Asset Management as a credit analyst covering the global oil & gas and non-North American financials sector. Past sector coverage includes pipelines, utilities, and industrials. Prior to his time at TD Asset Management, Nick worked for TD Securities on a foreign exchange sales desk in addition to a fixed income sales desk. Nick holds a Bachelor of Arts Degree from Queen's University...
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Key Takeaways
  • Interest rates have peaked for this cycle.
  • Investors collectively believe Central Bankers will achieve a soft landing and start cutting interest rates in the first half of 2024.
  • The global economy is slowing, vulnerabilities are starting to appear, and Central Banks are keen to avoid the mistakes of the 1970s. We believe they will keep rates higher for longer, until something cracks.
  • We expect a slowing economic environment and subsequent risk-off phase of lower rates and wider credit spreads, particularly in highly leveraged firms. Our funds are positioned accordingly.

Macro

Following the fastest and steepest rate hike cycle since the 1980s, many, us included, expected the North American economy to decelerate meaningfully this year, and possibly enter a recession. This has obviously not happened yet, GDP growth in the U.S. for the third quarter was a whopping 5.2%. Although, here in Canada, things have slowed down more meaningfully, with Q3 GDP coming at -1.4%. For all intents and purposes, GDP in Canada has not grown for the better part of this year. So far we have avoided outright recession, but it’s getting close.

Across the pond, the Eurozone and UK economies have been very weak. Many Eurozone countries have reported several quarters of zero or negative growth (most notably Germany). Figure 1 below shows the Goldman Sachs Current Activity Indicator, a high frequency composite measure of growth, along with an indicator for the start of the rate hike cycle, for both the UK and the Eurozone. Clearly, monetary policy has had the intended effect there, with growth slowing notably for the past 18 months.

So, why has the Canadian, but more so, the U.S. economy, been so resilient to this fast and furious rate hike cycle? Looking at the composition of growth, two main themes emerge. First, consumers have kept on spending, sometimes even more than they earn. How so? Credit card borrowing in the U.S. is at all time highs, even with credit card rates also at all time highs. With banks tightening lending standards very aggressively and overall loan growth slowing rapidly, we expect consumers will find it much harder to keep spending at the current pace. Pandemic era savings were also a boost to spending this year, but most of the analysis we’ve read from the Fed and private economists, suggests that this might finally be done, meaning excess savings won’t be available to supplement consumption in excess of earnings. The exhaustion of excess savings might have started to bite, we are already observing increases in delinquency rates for consumer credit (auto and cards mostly), suggesting that the reality of higher rates is impacting activity.

Government spending has been another contributor to growth. Particularly in the U.S., but also to some extent Canada, where governments continue to run large deficits (Figure 2 below). It is particularly egregious in the U.S., where their government deficit is expected to come in at 6.2% of GDP this year and remain above 6% for the foreseeable future. Deficits of this magnitude are only typically seen in times of war or recession (Figure 2).

We are entering an election year in the U.S., and with a divided government and slim margins on both majorities in the House and the Senate, we suspect that it will be much harder for the Biden administration to push through another large spending bill in 2024. Therefore, we would expect the impulse to growth from government spending to turn from positive to negative next year.

So, the growth backdrop in North America, while it has remained more resilient than Europe in 2023, is set to slow in 2024. The tailwinds that supported outsized growth this year look to fade, or even become headwinds. The cost of higher rates is making its way through the economy, and past debt excesses are starting to hurt consumers and businesses (something that has happened much faster in Europe). The labour market has softened considerably from the tights of the pandemic, but still remains reasonably healthy. The unemployment rate is still relatively low (though well off the lows), and wages haven’t meaningfully declined. We believe that this is the function of two factors. First, businesses have had such a hard time finding workers post pandemic, that they are, to some extent, still hoarding some employees, for fear of not being able to replace them. Also, this transition takes time. Look at the large Canadian banks as a microcosm of this phenomenon. Earnings growth has been a challenge all year, first it was margins and revenue growth, then expenses were too high, and now finally provisions for bad loans are also going up. They have to act. And what is the fastest way to restore profitability when revenues and gross margins fall? Cut expenses. And that usually means cut headcount. We expect this trend to continue as growth slows further in 2024.

There was some significant progress in lower inflation in 2023. It is well off the highs experienced in 2021, but with core inflation still in the 3% range, it is still too high for central banker’s comfort. Given the passage of time and the continued softness in the economy, we expect inflation will continue to slowly drift lower. But barring a full-blown recession, the progress back to 2% will be very slow. Even with the progress made on inflation to date, both the Fed and BoC felt like they needed to keep hiking rates this year, increasing their overnight rate by 100 and 75bps, respectively. As they have said all along, the risks of doing too little outweigh the risks of doing too much. They remember very well the experience of the 1970s, when premature rate cuts in the late 1960 set the stage for the hyper-inflation of the 70s. At its December meeting, the BoC reiterated that inflation remains too high, and that they are prepared to hike again if progress is too slow. Similarly, the Fed, who hasn’t hiked since July, remains on hold, but still keeps the possibility of further rate hikes alive. Therefore, we believe that they are strongly inclined to drag their feet and leave rates at terminal for an extended period of time. Given the softness in the economy and the progress achieved on the inflation front, we firmly believe that both central banks (the ECB/BoE as well) are done with rate hikes for this cycle. Although, relative to the market, we believe rates are higher for longer. The main question now becomes: when in 2024 will they start to cut, and by how much?

The current market consensus is extremely optimistic on rate cuts. The market has decided that a soft landing is the most plausible outcome. All assets have rallied strongly since the end of October, with the view that the Fed has won the inflation fight without triggering a recession, and that rate cuts will be here shortly, allowing the economy to pick up. The futures market is now pricing-in 6 cuts by the Fed by Jan 2025, and 4 by the BoC by Oct 2024. This is either too aggressive (i.e. higher for longer/soft landing), or not aggressive enough (i.e. recession). We still think that recession is the most likely scenario for 2024, Table 1 below presents our expectations for rates and credit, in either scenario.

In a soft-landing scenario, where inflation drops closer to target later in 2024, we expect the BoC would venture to cut rates maybe 25-50bps, towards the end of the year, after an extended period on hold. In that context, we would expect long term rates to remain in the recent range. Under this higher for longer, soft landing scenario, we would expect credit spreads to keep grinding tighter from here, but not by a lot (15-35bps).

Alternatively, in a recession scenario, expect central banks to cut rates by 200-300bps, in line with previous downturns (outside of COVID or the GFC). In such a context, we would also expect the 10- and 30-year government bond yields to rally, perhaps by another 30-80bps, which would re-steepen the yield curve. In credit, IG spreads widening to about 180 to 200bps is consistent with past recessionary episodes (see Figure 3 below), while for high yield, usually in difficult economic environments, we tend to see spreads in the 700 to 1000bps range, so about double from where they are now (Figure 6 below in the text puts HY spread in historical context).

With this macro backdrop and these scenarios in mind, how are the funds positioned for the environment, and what should one expect as 2024 unfolds?

Fund Positioning: Defensive

As we are in the home stretch of 2023, we thought it would be helpful for investors to get some granularity on our fund’s positioning for next year. We have been in a defensive mode for most of the year. As we enter the last innings of the economic cycle, before central banks start cutting rates, the yield curve is fully inverted (short term rates are higher than long term rates) and risk assets (credit and equities) are at their most vulnerable point. It is hard to get the timing exactly right, for both rate cuts and risk assets selling off. Therefore, we try to position the portfolios in a comfortable waiting stance: maximize yield while pre-positioning for the eventual decline in interest rates and the widening of credit spreads. Below, we discuss in more detail the four main building blocks of the portfolios.

Building Block 1: Short-Term Credit for Low Volatility Carry

In our experience, with a fully inverted yield curve, the best place to harvest maximum yield with the lowest possible volatility is short-term (1-3 years) Investment Grade (or high-rated High Yield) corporate bonds. This is an important anchor and the largest building block of our portfolios. Table 2 below shows high level characteristics of this first building block as of November 30, 2023.

For example, the Diversified Bond Fund (DBF) currently has a 77% weight in short-term corporate bonds, which have an average duration of only 1.4 years, a current (cash) yield of 4.1% and a yield-to-maturity of 6.4%. For the Alternative Credit Opportunities (NACO) and Credit Income Opportunities (Ops), the characteristics of our short-term corporate bonds are broadly similar, but because of the leverage in the funds, we simply own more of it (161-167%). These are, on average, high-quality bonds, with a composite credit rating of A-.

Regular readers of our commentaries will recognize the difference between the current and yield to maturity of these positions. That is because we have been actively prioritizing discount bonds in the portfolios, for tax efficiency. So with between 1.3 and 1.9 years of duration, those corporate bonds will “earn their carry in a tax efficient way” while exhibiting very little volatility. Why? Because, unless a company defaults, its bonds mature at par ($100). And the closer a bond is to maturity, the stronger the pull to par.

Here's an example of a bond we own. BMO 2.88 09/17/29, callable in September 2024 (banks always call those bonds, even in the depths of the GFC or the pandemic), with a yield to maturity of 6.1% and a current yield of 2.9%. So, for just under a year, we will earn 6.1% annualized, with 2.9% of it in income, and the rest in capital gains. The price chart of this bond is shown in Figure 4 below.

Because of its very low coupon, the rapid increase in interest rates and credit spreads we witnessed in late 2021 and 2022 were not kind to this bond, with the price rapidly declining from $106 to just $94 late last year. But notice how, even with the BoC increasing interest rates this year by 75bps, the price of this bond was very well behaved, and more recently, how it has smoothed out. That is pull to par at work, and our portfolios are full of examples like this one: high quality company, low coupon, and a short time to maturity. We see this as a great source of low-volatility yield, and that’s why this is the #1 building block across the funds.

Building Block 2: Low Priced Hybrid Bonds and LRCN for Torque

Hybrid bonds and LRCN (Limited Recourse Capital Notes) are issued by investment grade companies, but because they rank lower in the capital structure, they either have a lower investment grade rating, or can sometimes end up with a high yield rating (average rating for our positions is BBB-). Table 3 below summarizes our exposure to this market segment. By design, we have focused on hybrid/LRCN bonds with low coupons and prices, because we believe they have the potential to generate substantial price upside. Hence the current yield of 5.5%-5.9% vs the yield-to-call of about 14%.

Here are two examples of hybrids/LRCN bonds we own, and why.

First off, TransCanada Pipelines, or TC Energy now. Their 2077 hybrid bond, with a coupon of 4.65% were issued in 2017. Hybrid bonds have value for companies because rating agencies assign them partial equity value, which in turn helps with their debt ratios. But, after their first call date (typically 5 or 10 years after issuance), they start to lose that equity value, giving issuers a very strong incentive to call them at that first call date. At a price of about $89 and a call date of May 2027, we find these TRP hybrid bonds very attractive. Their current yield is only 5.2%, but over the next 3.5 years, we will also make our way back to $100, from a $89 starting point, yielding 8.5% to call.

Another example of a low coupon/price security is TD 3.6% 2081. LRCN, by contrast to hybrids, do not lose equity value over their lifetime, so the decision to call them (they are callable every 5 years) is purely economic: could the bank issue a new LRCN in the market at a cheaper rate? Because of their very low coupon, they trade at a very low price, around $70, giving them a current yield of about 5.1%. Nothing to write home about. But the bank can call it (yield-to-call 17%), or let the coupon reset in October 2026, at a rate of 5-year Canada Bonds + 2.75%, which would be a coupon of about 5.9%, or a current yield of 8.4% at the current price. That is too high a current yield, versus what the bank could issue in the market, so we believe that the price will move higher, as we get closer to the call date. If not, we will own TD bank risk with an 8.4% cash yield. Not a bad outcome.

With a 22% to 28% weight in very low-priced, high-quality (average rating investment grade) hybrid and LRCN bonds, in the context of otherwise very defensive portfolios, we believe that we are maintaining exposure to a very cheap segment of the market, that will definitely enhance returns as we move closer to those call dates, with potential for nice price upside.

Building Block 3: Government Bonds for Ballast

It is common knowledge that, in risk-off environments, there is a flight to safety, and investors typically converge towards long and intermediate term government bonds, with the expectation that longer-term interest rates will decline, and that they will realize capital gains on their 10 and 30-year government bonds. Figure 5 below puts this into perspective. We show the yield on the 30-year U.S. government bond, along with the net decline in the yield during recessions (shaded), from peak to trough.

The chart below illustrates this. Historically, in recession, long bonds yields rally in the range of 0.8% to 4.7%, with the largest declines in yield following the largest and steepest increases. We hold no crystal ball, but the most recent sell-off would certainly rival, from a historical perspective, the 1980s.

It should therefore be no surprise that long-term government bonds make up our 3rd portfolio building block. Table 4 below shows our current exposure to 30-year government bonds. It should be noted that in DBF, we own both US and Canada, whereas in the other two funds, we only own U.S. Government bonds. Our ownership of U.S. bonds is done synthetically, using options on the iShares 20+ Year Treasury Bond ETF. That ETF approximates the ownership of a 30-year US Treasury Bond very well. The portfolio weights below represent the net delta notional exposure of the funds to this ETF (i.e. the option position’s representation for small movement in the ETF itself).

Why use options, as opposed to buying 30-year Treasuries or the ETF outright?

1) Less impact on portfolio yield. Short-term credit yields a lot more than 30-year Treasuries do, so if we substituted our short-term corporate bonds for 30-year government bonds, we would sacrifice yield. This isn’t the case using options.

2) We “own” this TLT ETF by selling put options, and using the premium generated to buy call options. We always do it premium neutral (i.e. no net cost to the funds). The puts we sell are slightly out of the money, and so are the calls we buy. If TLT sells-off, like it did from August to October, those out of the money options afford us a margin of safety, vs outright ownership. Overall, this makes the position less volatile.

Therefore, consistent with prior end of economic and rate hike cycles, there can be significant upside from owning long-term government bonds, with the size of the rally typically commensurate with the severity of the recession or the sell-off that precedes it. A 100bps only takes us back to where we started August 2023, so this rally might still have legs.

Building Block 4: Short High Yield for More Ballast

All our funds have a credit focus. When we expect a slow down in the economic cycle, we like to hedge some of our credit exposure directly. High yield bonds, by definition, are issued by companies that carry more leverage or that have less stable business models. Already this year, we have seen HY default rates move higher, from the post pandemic lows of 2% to about 4%. Many sell side economists’, rating agencies’ and credit specialists’ models point to a further acceleration in default rates, possibly to 8%. Historically, when default rates increase by that much, HY credit spreads (Figure 6 below) are between 700 and 1000bps. Compare that with current spreads of only 400bps, and you see why we like being short HY as a hedge against our (primarily investment grade) credit.

cross all our funds we have initiated a short position in high yield ETF’s, the DBF has a 7% short position (JNK and HYG, 3.8 years duration), and NACO and Ops are at 11/12%. Under our recession scenario, HY credit spreads could move 300-600bps wider, resulting in a price change of roughly -11% to -23% (3.8 years x 3% to 6%). This is not a forecast, but within the historical context, HY in a recession won’t trade with a 400bps spread.

Conclusion

Putting it all together our four building blocks construct portfolios that will:

1) Generate lots of low volatility income with tax efficiency.

2) Provide an upside to credit through our allocation to low priced hybrid and LRCN bonds without sacrificing quality,

3) Have significant exposure to long term US and Canadian government bonds, which will rally as the monetary cycle ends.

4) Have HY credit hedges to dampen volatility.

Over the last 18 months we have been moving the portfolios to this current stance, this hasn’t been an overnight decision. When the time comes, and we have done this before, we will go from Defensive to Opportunistic mode, acting from a position of strength, instead of fielding margin calls. This is the same playbook we followed in 2019/2020, and while every cycle is different, history always rhymes.

Until next month, 

Mark, Etienne & Nick
Ninepoint Partners

Appendix: Portfolio Characteristics

Historical Commentary

View All
  • Commentary
    December 2024
    Ninepoint Fixed Income Strategy
    2024 saw the end of the hiking cycle in Canada, the U.S. and Europe. Central banks were on hold for most of the first half and started cutting rates in June after several months on hold, encouraged by lower headline and core inflation.
    Fixed Income
  • Commentary
    November 2024
    Ninepoint Fixed Income Strategy
    Now that the dust has settled following the U.S. presidential election, market participants are cautiously looking ahead to 2025. In Canada, we continue to see a deterioration in the labour market, with the unemployment rate now at 6.8% and rising (Figure 1 below). GDP growth is also disappointing, with only 1% growth in the third quarter. With this much slack in employment and the economy operating well below potential, we expect the Bank of Canada to continue cutting rates at a brisk pace.
    Fixed Income
  • Commentary
    October 2024
    Ninepoint Fixed Income Strategy
    A lot has happened since our last commentary. Global growth (excluding the U.S.) continues to slow, prompting central banks around the world to loosen monetary policy (China, UK, Sweden, ECB, Canada and the Fed all cut rates this past month).
    Fixed Income
  • Commentary
    September 2024
    Ninepoint Fixed Income Strategy
    All eyes were on the U.S. Federal Reserve meeting in September, and Chair Powell did not disappoint, kicking off the rate cut cycle with an oversized 50bps cut. For reference, the last time the Fed cut rates by 50bps was during the pandemic, and prior to that 2008. Suffice to say, they are a rare occurrence typically associated with extreme events.
    Fixed Income
  • Commentary
    August 2024
    Ninepoint Fixed Income Strategy
    Following the intense volatility of early August, all eyes were on central bankers at the annual Jackson Hole symposium. In his speech, Chair Powell did not disappoint, stating that “We do not seek or welcome further cooling in labor market conditions” and that “The time has come for policy to adjust”.
    Fixed Income
  • Commentary
    July 2024
    Ninepoint Fixed Income Strategy
    As discussed last month, economic momentum has started to wane, and this has caught the attention of central banks
    Fixed Income
  • Commentary
    June 2024
    Ninepoint Fixed Income Strategy
    Over the past month, economic momentum in the U.S. has taken a turn for the worse, with housing, retail sales, PMIs and even employment measures all coming in very weak. To put it all in perspective, we have shown in Figure 1 below, the U.S. economic surprise index, as calculated by Bloomberg. Rarely has it been this weak, and the weakness is quite broad across most sectors. With fiscal stimulus waning, U.S. households running out of pandemic-era savings and monetary policy biting, it was to be expected that economic activity would eventually wane.
    Fixed Income
  • Commentary
    May 2024
    Ninepoint Fixed Income Strategy
    Last month, we discussed that the market had become too bearish on bonds, assuming that the string of strong data would continue and therefore expecting monetary policy to remain very restrictive (or perhaps even more restrictive). Since then, we have seen U.S. economic data surprise to the downside (the strong U.S. May jobs report being the exception, but the details were mixed) and with that, bonds have rallied off the lows.
    Fixed Income
  • Commentary
    April 2024
    Ninepoint Fixed Income Strategy
    U.S. inflation continues to surprise to the upside, dispelling this notion that the elevated price pressures seen so far this year were merely a “bump in the road”. With that, it has become clear that the path to rate cuts this year has narrowed significantly. As Figure 1 shows, the bond market has gone from pricing 1.6% of cuts in January to now only 0.3% for all of 2024.
    Fixed Income
  • Commentary
    March 2024
    Ninepoint Fixed Income Strategy
    After getting overly excited about rate cuts at the start of the year, market sentiment has now gone full circle, discounting fewer and a much later start to rate cuts.
    Fixed Income
  • Commentary
    February 2024
    Fixed Income Strategy
    Last month, we made the point that market expectations for rate cuts this year were still unrealistic, and that given the current growth and inflationary dynamics, rate cut expectations needed to be both pushed out in time and reduced in magnitude. As of the end of February, with only about 3 full cuts expected for 2024 in both Canada and the U.S. (same as the Fed’s guidance), we feel like expectations are much more reasonable.
    Fixed Income
  • Commentary
    December 2023
    Ninepoint Fixed Income Strategy
    Despite all the ups and downs in rates, high quality short-term corporate bonds performed well, generating a lot of income for the funds. Long-term interest rates rallied a lot in Q4, we expect a consolidation before the next leg lower.
    Fixed Income
View All
All Funds
  • NPP931
    (Series F)
    Exchange Traded Funds Liquid Alternatives Fixed Income
    $8.71 $0.00 (-0.03%)
    As at 1/14/2025
    Growth of $10,000 Invested as at 12/31/2024
    Performance as at 12/31/2024
    1 Year
    10.16%
    3 Year
    2.59%
    5 Year
    -
    10 Year
    -
    Incept.1
    2.48%
    1 Inception Date 5/12/2021
    Go To Fund

    All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 11/29/2024. Top ten holdings, sector allocation and geographic allocation as at 11/29/2024. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. Geographic allocation based on % of net asset value and excludes cash. Numbers may not add up due to rounding. Cash and cash equivalents include non-portfolio assets and/or liabilities.

    The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the investment fund or returns on investment in the investment fund.

    The monthly distribution amount may be adjusted by the Manager without notice throughout the year as market conditions change. Monthly distributions will be comprised of net income, net realized capital gains and/or return of capital. Any net income and/or net realized capital gains earned by the Fund in excess of the monthly distribution will be distributed to unitholders annually in December.

    The Fund is generally exposed to the following risks: borrowing risk; collateral risk; concentration risk; credit risk; currency risk; cybersecurity risk; derivatives risk; foreign investment risk; inflation risk; interest rate risk; leverage risk; liquidity risk; market risk; performance fee risk; securities lending, repurchase and reverse repurchase transactions risk; series risk; short selling risk; small company risk; specific issuer risk; substantial securityholder risk; tax risk. Additional risks associated with an investment in ETF Series securities of this Fund include: absence of an active market for ETF Series risk; halted trading of ETF Series risk; trading price of ETF Series risk.

    Ninepoint Partners LP is the investment manager to a number of funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rates of return for series F units of the Funds for the period ended 11/29/2024 are based on the historical annual compounded total returns including changes in unit value and reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

     

  • NPP507
    (Series F)
    Hedge Funds & LPs Fixed Income
    $8.88 -$0.04 ()
    As at 12/31/2024
    Growth of $10,000 Invested as at 12/31/2024
    Performance as at 12/31/2024
    1 Year
    9.97%
    3 Year
    3.18%
    5 Year
    5.95%
    10 Year
    -
    Incept.1
    5.01%
    1 Inception Date 7/1/2015
    Go To Fund

    An investment in the Fund requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the Fund. Investors in the Fund must be prepared to bear such risks for an extended period of time. No assurance can be given that the Fund’s investment objectives will be achieved or that investors will receive a return of their capital. Investors should have the financial ability and willingness to accept the risk characteristics of the Fund’s investments. The Fund is available to accredited investors only and Advisors should review the offering documents and the financial ability of their clients in order to ensure investment suitability.

    All returns and fund details are a) based on Class  F  units; b) net of fees; c) annualized if period is greater than one year; d) as at 11/29/2024. Portfolio allocation includes allocation made with pending subscriptions. Top ten holdings as at 11/29/2024. Top ten holdings based on % of net asset value. Numbers may not add up due to rounding.

    The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the investment fund or returns on investment in the investment fund.

    The Manager intends to make a monthly distribution on the Class B Units, the Class F Units and the Class I Units, to holders of such Units, out of the net income of the Fund. The amount of any distributions may fluctuate and there can be no assurance that any distributions will be made in any period or of any particular amount. Purchasers should not confuse these distributions with the Fund’s rate of return or yield. The distributions on the Class B Units, the Class F Units and the Class I Units are not guaranteed.

    The Ninepoint Credit Income Opportunities Fund is generally exposed to the following risks. See the offering memorandum of the Fund for a description of these risks: General Economic and Market Conditions; Inflation and Supply Chain Risk; Disease and Epidemics; Risks Related to the Russian Invasion of Ukraine; Assessment of the Market; Not a Public Mutual Fund; Class Risk; Charges to the Fund; Changes in Investment Objective, Strategies and Restrictions; Unitholders not Entitled to Participate in Management; Dependence of the Manager on Key Personnel; Reliance on the Manager; Resale Restrictions; Illiquidity; Possible Effect of Redemptions; Liability of Unitholders; Potential Indemnification Obligations; Lack of Independent Experts Representing Unitholders; No Involvement of Unaffiliated Selling Agent; Valuation of the Fund’s Investments; Concentration; Foreign Investment Risk; Illiquidity of Underlying Investments; Part X.2 Tax; Litigation; Fixed Income Securities; Equity Securities; Idle Cash; Currency Risk; Suspension of Trading; Investment Risk Level.

    The Ninepoint Credit Income Opportunities Fund is offered on a private placement basis pursuant to an offering memorandum and are only available to investors who meet certain eligibility or minimum purchase amount requirements under applicable securities legislation. The offering memorandum contains important information about the Fund, including its investment objective and strategies, purchase options, applicable management fees, performance fees, other charges and expenses, and should be read carefully before investing. Performance data represents past performance of the Fund and is not indicative of future performance. Data based on performance history of less than five years may not give prospective investors enough information to base investment decisions on. Please contact your own personal advisor on your particular circumstance. This communication does not constitute an offer to sell or solicitation to purchase securities of the Fund. 

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

  • NPP118
    (Series F)
    Mutual Funds Exchange Traded Funds Fixed Income
    $10.21 -$0.01 (-0.06%)
    As at 1/14/2025
    Growth of $10,000 Invested as at 12/31/2024
    Performance as at 12/31/2024
    1 Year
    7.93%
    3 Year
    0.94%
    5 Year
    1.91%
    10 Year
    2.81%
    Incept.1
    3.52%
    1 Inception Date 8/6/2010
    Go To Fund

    All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 11/29/2024. Top ten holdings, sector allocation and geographic allocation as at 11/29/2024. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. Geographic allocation based on % of net asset value and excludes cash. Numbers may not add up due to rounding. Cash and cash equivalents include non-portfolio assets and/or liabilities.

    The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the investment fund or returns on investment in the investment fund.

    The monthly distribution amount may be adjusted by the Manager without notice throughout the year as market conditions change. Monthly distributions will be comprised of net income, net realized capital gains and/or return of capital. Any net income and/or net realized capital gains earned by the Fund in excess of the monthly distribution will be distributed to unitholders annually in December.

    The Fund is generally exposed to the following risks: borrowing risk; capital depletion risk (Series T, Series FT, Series PT, Series PFT, Series QT, and Series QFT units only); concentration risk; credit risk; currency risk; cybersecurity risk; derivatives risk; exchange traded funds risk; foreign investment risk; inflation risk; interest rate risk; liquidity risk; market risk; regulatory risk; securities lending, repurchase and reverse repurchase transactions risk; series risk; short selling risk; specific issuer risk; substantial securityholder risk; tax risk. Additional risks associated with an investment in ETF Series securities of this Fund include: absence of an active market for ETF Series risk; halted trading of ETF Series risk; trading price of ETF Series risk.

    Ninepoint Partners LP is the investment manager to a number of funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rates of return for series F units of the Funds for the period ended 11/29/2024 are based on the historical annual compounded total returns including changes in unit value and reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This communication does not constitute an offer to sell or solicitation to purchase securities of the Funds.

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

    © 2024 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; (3) and is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

    Morningstar Ranking/Number of Funds in Category displays the Fund’s actual rank within its Morningstar Category based on average annual total return and number of funds in that Category. The ranking is subject to change every month.

    The Morningstar Risk Adjusted Return (MRARs), commonly referred to as the Star Rating, relate the risk-adjusted performance of a fund to its peers with the same CIFSC Fund category for the period ended as noted and are subject to change monthly. Morningstar calculates ratings for categories with at least 5 funds. To determine a fund’s rating, the fund and its peer are ranked by their MRARs. If a fund scores in the top 10% of its category, it receives five stars (High); if it falls in the next 22.5% , it receives four stars (Above Average); the next 35% earns a fund three stars(Neutral or Average); those in the next 22.5% received two stars (Below Average); and the lowest 10% received one star (Low). The overall rating is a weighted combination of the 3, 5 and 10 year ratings. For greater detail, see morningstar.ca.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

     

All Ninepoint Diversified Bond Fund returns and fund details are a) based on Series F units; b) net of fees; c) annualized if period is greater than one year; d) as at 11/30/2023. All Ninepoint Credit Income Opportunities Fund returns and fund details are a) based on Class F units; b) net of fees; c) annualized if period is greater than one year; d) as at 11/30/2023. All Ninepoint Alternative Credit Opportunities Fund returns and fund details are a) based on Class F units; b) net of fees; c) annualized if period is greater than one year; d) as at 11/30/2023.

The Risks associated with investing in a Fund depend on the securities and assets in which the Funds invests, based upon the Fund's particular objectives. There is no assurance that any Fund will achieve its investment objective, and its net asset value, yield and investment return will fluctuate from time to time with market conditions. There is no guarantee that the full amount of your original investment in a Fund will be returned to you. The Funds are not insured by the Canada Deposit Insurance Corporation or any other government deposit insurer. Please read a Fund's prospectus or offering memorandum before investing.

Ninepoint Credit Income Opportunities Fund is offered on a private placement basis pursuant to an offering memorandum and are only available to investors who meet certain eligibility or minimum purchase amount requirements under applicable securities legislation. The offering memorandum contains important information about the Funds, including their investment objective and strategies, purchase options, applicable management fees, performance fees, other charges and expenses, and should be read carefully before investing in the Funds. Performance data represents past performance of the Fund and is not indicative of future performance. Data based on performance history of less than five years may not give prospective investors enough information to base investment decisions on. Please contact your own personal advisor on your particular circumstance. This communication does not constitute an offer to sell or solicitation to purchase securities of the Fund. 

Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), other charges and expenses all may be associated with mutual fund investments. Please read the prospectus carefully before investing. The indicated rate of return for series F units of the Fund for the period ended 11/30/2023 is based on the historical annual compounded total return including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.

The opinions, estimates and projections (“information”) contained within this report are solely those of Ninepoint Partners LP and are subject to change without notice. Ninepoint Partners makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, Ninepoint Partners assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. Ninepoint Partners is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Please contact your own personal advisor on your particular circumstances.

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Ninepoint Partners LP. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund managed by Ninepoint Partners LP is or will be invested.

Ninepoint Partners LP and/or its affiliates may collectively beneficially own/control 1% or more of any class of the equity securities of the issuers mentioned in this report. Ninepoint Partners LP and/or its affiliates may hold short position in any class of the equity securities of the issuers mentioned in this report. During the preceding 12 months, Ninepoint Partners LP and/or its affiliates may have received remuneration other than normal course investment advisory or trade execution services from the issuers mentioned in this report.