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Please read the following terms and conditions carefully. By accessing rbcgam.com and any pages thereof (the "site"), you agree to be bound by these terms and conditions as well as any future revisions RBC Global Asset Management Inc. ("RBC GAM Inc.") may make in its discretion. If you do not agree to the terms and conditions below, do not access this website, or any pages thereof. Phillips, Hager & North Investment Management is a division of RBC GAM Inc. PH&N Institutional is the institutional business division of RBC GAM Inc.

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About Our Funds

The Funds are offered by RBC GAM Inc. and distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with the Funds. Please read the offering materials for a particular fund before investing. The performance data provided are historical returns, they are not intended to reflect future values of any of the funds or returns on investment in these funds. Further, the performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. The unit values of non-money market funds change frequently. For money market funds, there can be no assurances that the fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund securities are not guaranteed by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. RBC ETFs do not seek to return any predetermined amount at maturity. Index returns do not represent RBC ETF returns.

About RBC Global Asset Management

RBC Global Asset Management is the asset management division of Royal Bank of Canada ("RBC") which includes the following affiliates around the world, all indirect subsidiaries of RBC: RBC GAM Inc. (including Phillips, Hager & North Investment Management and PH&N Institutional), RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Investment Management (Asia) Limited, BlueBay Asset Management LLP, and BlueBay Asset Management USA LLC.

Forward-Looking Statements

This website may contain forward-looking statements about general economic factors which are not guarantees of future performance. Forward-looking statements involve inherent risk and uncertainties, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement. All opinions in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.

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The Canadian High Yield Mortgage strategy is intended for mortgage investors with greater tolerance for risk. It has a strategic focus on higher leverage first mortgages and high-quality subordinate mortgages on properties with strong and stable cash flow. The strategy’s secondary focus is lower leverage first mortgages on properties characterized as “opportunistic” or “value-added.” The strategy’s investment process is bottom up and opportunistic, and emphasizes high quality, experienced borrowers with proven track records of success.

Strategy overview

  • Subordinate and conventional plus first mortgages on commercial and multi-residential properties in Canada
  • Bottom-up and opportunistic investment process targeting high quality borrowers and unique opportunities
  • Aims to provide a high income return with low interest rate sensitivity
  • Returns driven by liquidity premiums, credit premiums, and tactical asset allocation at origination
  • Reduced liquidity provides better investor alignment and reduces cash drag on returns

Our approach

Investment philosophy and style

  • Focus on capital preservation and consistent added value through market cycles
  • Seeks opportunities that do not fit the conventional mortgage market but still represent strong risk-adjusted returns
  • Quality-biased relative to other higher yielding mortgage strategies

Investment process

  • Concentrated opportunistic approach with a strategic focus on core markets
  • Portfolio managers dictate asset mix to capitalize on market opportunities and inefficiencies
  • Diligence is bottom-up and reactive throughout credit and negotiation process
  • Risk mitigation through deal-specific loan structure
  • Proactive approach to risk management throughout the life of each mortgage

Portfolio construction

  • Mortgages with a maximum loan-to-value ratio of 85% and a minimum cash flow coverage ratio of 1.05x on income-producing properties
  • Maximum 10% in a single individual mortgage
  • Maximum term to maturity of 11 years
  • High turnover strategy despite being a ‘lend and hold’ strategy; risk profile can be adjusted relatively quickly
  • Excess returns driven by liquidity premiums, credit premiums, and tactical asset allocation at origination
  • Quarterly gated redemptions, hard and soft lock-up periods

Additional information

Inception
July 2015
Primary benchmark
FTSE Canada Short Term Overall Bond Index
Vehicle
Canadian Investment Fund

Investment team

Mortgage Investment team

Group of specialists dedicated to designing and implementing mortgage solutions

Connect with our team to learn more

Contact us

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