Alt Thinking September 30, 2024
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Ninepoint Target Income Fund

Ninepoint Target Income Fund - September 2024
Investment Team
  • Colin Watson
    Vice President, Portfolio Manager
    Colin Watson
    Vice President, Portfolio Manager
    Colin Watson's background spans across equities, asset allocation & derivative-based strategies. Prior to Ninepoint Partners, Colin worked as a Portfolio Manager at IMCO on a team responsible for overseeing IMCO’s $26B public equity allocation and deploying derivatives-based strategies for IMCO’s public asset allocation strategy. Prior to IMCO, Colin worked at Ninepoint Partners on equity selection & options-based overlays. Colin holds a Bachelor of Commerce Degree from McMaster Unive...
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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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The Ninepoint Target Income Fund Q3- 2024 Update

Equities experienced a sudden surge in volatility mid-quarter, triggered by the unwinding of Yen carry trade positions. This resulted in implied volatility moves well above what has typically occurred in comparable equity market selloffs of recent years. Despite being impacted by the outsized volatility move and equity market decline, the Ninepoint Target Income Fund demonstrated defensive attributes, with the F class showing a relatively modest decline of -57bps during the August 1st to 6th drawdown. The fund subsequently returned 37bps during August.  We believe showcasing defensive properties despite exposure to a dramatic risk unwind, is a testament to the value the strategy can bring to income portfolios when challenging markets arise.

Short-term cash yields moved moderately lower during the quarter post Bank of Canada rates cuts, meanwhile put premiums moved slightly higher, above the lower premium environment witnessed in the first half of 2024.

In the Ninepoint Target Income Fund, approximately a quarter of the options portfolio rolled mid-September into new 1 year put options. The portfolio at quarter end, sat with strike prices greater than -15% out-the-money.  This continues to provide downside protection before options premiums and investment principal are at risk at expiry.  

Colin Watson 
Portfolio Manager
Ninepoint Partners

Source: Ninepoint Partners, all data is rounded to nearest decimal & subject to change,

Why Invest in the Ninepoint Target Income Fund?

  • Income Diversification: Provides a differentiated income stream via put option premiums to complement traditional income portfolios.

  • Defensive Equity Income Strategy: Generates an annual 6%* target income distribution with the potential for moderate downside protection in market declines.

  • Active Risk Management: Ability to manage risk and index exposures to achieve investment goals.

Historical Commentary

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  • Commentary
    June 2024
    Ninepoint Target Income Fund
    Q2 saw a continuation of strength in technology shares with more muted performance in many cyclical sectors such as industrial and financials. Index implied volatility was stable with muted correlation between equities and low single stock volatility.
    Liquid Alternatives
  • Commentary
    March 2024
    Ninepoint Target Income Fund
    The global equity rally continued in Q1 on sustained strength in technology shares and improving breadth from cyclical sectors. Index implied volatility was stable with muted correlation between equities and moderately lower single stock volatility expectations. While technology sectors continue to show strong earnings revisions and cyclical sectors are also seeing some earnings improvement;
    Fixed Income
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All Funds
  • NPP5002
    (Series F)
    Mutual Funds Exchange Traded Funds Equity
    $9.97 $0.00 (-0.02%)
    As at 11/20/2024
    Growth of $10,000 Invested as at 10/31/2024
    Performance as at 10/31/2024
    1 Year
    5.85%
    3 Year
    -
    5 Year
    -
    10 Year
    -
    Incept.1
    5.85%
    1 Inception Date 8/2/2022
    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 10/31/2024, e) 2022 annual returns are from 08/02/22 to 12/31/22. Top ten holdings, sector allocation and geographic allocation as at 10/31/2024. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. 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: Capital depletion risk; Concentration risk; Currency risk; Cybersecurity risk; Derivatives risk; Foreign investment risk; Inflation risk; Interest rate risk; Liquidity risk; Market risk; Securities lending, repurchase and reverse repurchase transactions risk; Series risk; Short selling 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 10/31/2024 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

1All 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 9/30/2024, e) 2022 annual returns are from 08/02/22 to 12/31/22.

The Fund is generally exposed to the following risks: Capital depletion risk; Concentration risk; Currency risk; Cybersecurity risk; Derivatives risk; Foreign investment risk; Inflation risk; Interest rate risk; Liquidity risk; Market risk; Securities lending, repurchase and reverse repurchase transactions risk; Series risk; Short selling 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 the Ninepoint 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 rate of return for series F units of the Fund for the period ended 9/30/2024 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. 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 is or will be invested.

Ninepoint Partners 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 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 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.