Ottawa considers issuing ultra-long bonds

Los Angeles-based Capital Group has announced the launch of Capital Group World Bond Fund (Canada), a globally diversified fixed-income portfolio for Canadian investors.

The mutual fund aims to provide a “prudently managed” portfolio of bonds and other debt securities of global issuer and can become a good addition to equity portfolios, the firm says in a news release.

“In this low interest rate environment, it’s tempting to reach for yield,” says Thomas Høgh, portfolio manager and the mutual fund’s principle investment officer, in a statement. “High-yielding bond strategies could be at risk of sharp price declines due to their high correlation to equity markets. We believe bonds should anchor a portfolio and behave like bonds. A prudently managed bond portfolio should provide income, capital preservation, inflation protection and diversification from equities.”

Capital Group World Bond Fund (Canada) is designed to give exposure to global bond markets with different economic cycles, yields and currency valuations. This can add an extra layer of bond diversification.

The mutual fund can invest in any country, currency, credit quality, coupon or maturity, including a mix of government, corporate and mortgage- and asset-backed bonds worldwide.

The portfolio is offered by Toronto-based Capital International Asset Management (Canada) Inc., a subsidiary of Capital Group. The fund’s four portfolio managers are Mark Brett, David Daigle, Høgh and Rob Neithart.

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