IA Clarington Investments Inc. announced the launch of the IA Clarington Core Plus Bond Fund and the IA Clarington Focused U.S. Equity Class on Wednesday.
“We’re expanding our line-up to provide investors a unique way to protect their investment grade fixed income against interest rate risk with the Core Plus Bond Fund,” said Eric Frape, senior vice president, product and investments at IA Clarington. “Investors will also be able to take advantage of the ongoing economic recovery in the U.S. with the Focused U.S. Equity Class.”
The IA Clarington Core Plus Bond Fund gives financial advisors and investors a fixed income solution that offers the stability of investment grade corporate bonds while protecting against interest rate risk and adds the benefit of enhanced income through holdings in senior loans and other higher yielding securities.
“It is nearly impossible to predict when interest rates will rise, but it’s clear that the once-in-a-lifetime opportunity to earn equity-like returns from fixed income has given way to a new environment where fixed income investors are earning a lot less yield than in the past,” said Jeff Sujitno, vice president and portfolio manager for the IA Clarington Core Plus Bond Fund. “In this environment, investors will benefit from rethinking the traditional approach to fixed income investing and that’s the approach we’re taking with this fund to manage that interest rate risk.”
The IA Clarington Focused U.S. Equity Class leverages the stock-picking expertise of portfolio manager David Taylor. Taylor’s signature style of value investing focuses on uncovering quality stocks that have been overlooked or are currently out of favour due to short-term events or market conditions.
“Historically, economic expansions have averaged nine years and typically, rising interest rates and inflation mark the end. We are only five years into this expansion and both rates and inflation remain low,” said Taylor about concerns that the U.S. market has reached a top. “Much of the earnings growth in this bull market has been the result of cost cutting and efficiencies. With an improving global economy, corporate revenues are starting to reap the benefits in terms of increasing volumes and raising prices and this fund provides an opportunity to profit from that growth.”