The Steinberg High Yield Fund
Investors face a conundrum. Government bond rates are now at their lowest level since the 1930’s – so low that they do not generate adequate income or offer protection against higher inflation. Equity markets may offer inflation protection, but are inherently volatile and do not offer stability of income.
Is there an alternative that offers both the potential for enhanced returns and less volatility than equities?
There is and it is high yield corporate bonds.
The chart below gives an indication of the differences in yield between high yield bonds and government bonds:
*As of January 1st, 2014 the average maturity of the Steinberg High Yield Fund is approximately 5 years.
Over the past several years, the high yield corporate bond market has been among the strongest performing investment classes, including equities. On a risk-adjusted basis, high yield bonds were among the best performing asset class in 2011 and the outlook remains very positive.
Our team at Lorne Steinberg Wealth Management has a long history in the high yield bond market. The Steinberg High Yield Fund capitalizes on our expertise to address the need for yield by fixed income investors. This fund allows individual Investors to invest in a diversified portfolio of otherwise inaccessible fixed-income instruments, which offer the opportunity for significantly greater rates of return than government bonds.
The Steinberg High Yield Fund seeks to maximize total return by investing primarily in higher yielding corporate bonds and other securities. Our approach to the high yield market is consistent with the conservative, value–based investment philosophy that defines Lorne Steinberg Wealth Management.
Our research efforts are driven by the following principles:
• Bottom-up fundamental credit research
• Focus on higher quality, non-investment grade bonds
• Total return, not just income
• Diversify broadly across issuers and industries
The rate of return shown is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the Fund or returns on investment in the Fund. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the declaration of trust before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all dividends and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Performance results are not guaranteed, values may change frequently and past performance may not be repeated