The RBC Global Fixed Income and Currencies team manages a broad range of global fixed income products. The team evaluates opportunities in global bond and currency markets by utilizing a proven investment process with a robust risk-management culture. We aim to build resilient portfolios that seek to deliver consistent returns over the market cycle and preserve capital.
- We take an active-management approach with a long-term investment horizon, aiming to deliver consistent returns and preserve capital over the market cycle.
- We use a team-based approach in order to provide our clients with the full depth and breadth of our combined expertise and to ensure continuity in the event of management turnover.
- We rely on intensive fundamental credit analysis from our credit team who also leverage the insights and capabilities of the firm’s equity teams.
- We diversify globally in order to lower volatility and access more opportunities for earning excess returns (alpha).
- We aim to outperform our funds’ benchmarks over a full market cycle through smart portfolio construction, tactical asset allocation, credit and security selection, as well as active currency and duration management.
- We pay particular attention to portfolio construction and position sizing, making sure that risks taken are proportional to opportunities available in the market at any given time.
- We de-emphasize forecasting as an investment tool in favour of building portfolios which are resilient in a range of economic and market scenarios.
- We believe that hedging foreign-currency risk is essential in core investment grade global bond portfolios.
- We incorporate review of environmental, social and governance (ESG) risks into our investment process, believing that these factors are relevant to a complete assessment of credit risk and security valuation.
Multi-layered approachWe rely on a multi-layered approach that is methodical, consistent and empirical.
Top-down perspectiveWe consider global fiscal and monetary conditions in relation to regional economic growth and inflation projections.
Bottom-up security selectionThe relative value of individual securities is assessed by a team of portfolio managers and credit analysts who incorporate in-depth industry/sector analysis.
Opportunistic credit useWe tactically manage allocations to various credit markets such as high yield and emerging market debt in line with the risk-reward opportunities available.
Scenario analysisRather than building portfolios for a single forecast, we conduct multiple scenario analyses in order to understand and compare potential outcomes and risk-return profiles of our strategies.
Foreign exchangeWe manage foreign-currency risk by hedging passive currency exposures back into Canadian dollars, and actively managing overlay positions to enhance returns.
Extended time horizonWe evaluate market opportunities for an 18-36 month time horizon, which allows us to take advantage of market volatility.
Tactical asset allocation
- Gov't vs. credit
- HY, EM Sov
- EM Corp
- Preferred bonds
- Yield curve
- Regional allocation
- X-country trade
- Inflation-linked bonds
- Credit curve
- Security selection
- Dynamic hedging