Mackenzie Investments has launched three innovative investment products to address investors' needs to manage longevity, income, volatility and inflation.
The Mackenzie Unconstrained Fixed Income Fund is one of the first absolute return strategy mutual funds in Canada that is unconstrained by traditional relative return benchmarks. The product pursues an absolute return strategy meaning that it aims to deliver positive returns over a market cycle, targeting a specific return objective versus traditional relative return products and using derivatives to reduce volatility.
Also introduced are two retirement income portfolios that are multi-asset solutions, designed to generate a competitive level of income with some capital appreciation, while also delivering lower volatility. The Mackenzie Monthly Income Conservative Portfolio and Mackenzie Monthly Income Balanced Portfolio will seek competitive yields while mitigating downside market risks and maintaining capital appreciation.
"Investors are looking for solutions that will mitigate volatility and will effectively manage the decumulation phase in retirement while still generating returns," says Jeff Carney, President and Chief Executive Officer of Mackenzie Investments. "We hear their call, and we are responding with some of our most innovative products yet – harnessing the unique skill set of Mackenzie's fixed income and asset allocation teams."
The three new Mackenzie Investments products directly address key components within LIVE IT (talkliveit.com), a new framework for investment conversations introduced last month by Mackenzie. The LIVE IT framework is based on the six concerns that matter most to investors: Longevity, Income, Volatility, Estate, Inflation, and Taxes.
Mackenzie Unconstrained Fixed Income Fund pursues an absolute return strategy that uses modern investment tools. Unconstrained by traditional relative return benchmarks, the fund aims to provide positive returns over a market cycle by investing in higher yielding securities across the global fixed income landscape. It mitigates downside risk through the use of derivatives and tactical movements between high yield and investment grade fixed income securities.
"Relative to riskier assets such as equities and high yield bonds, the Mackenzie Unconstrained Fixed Income Fund is a solution that is designed to offer investors a smoother ride through extreme market volatility," says Steve Locke, Senior Vice President, Investment Management, and lead of the Mackenzie Unconstrained Fixed Income Fund. "Key differentiators are that the fund will be truly unconstrained within fixed income and have derivative exposure to mitigate downside risk, regardless of market conditions."
Mackenzie Retirement Portfolios (Mackenzie Monthly Income Conservative Portfolio and Mackenzie Monthly Income Balanced Portfolio) are multi-asset solutions that offer lower volatility than existing balanced funds and are designed to generate a competitive level of income with some capital appreciation. The portfolios employ a variety of asset classes and strategies, including an absolute return strategy, dividend paying equities and REITs, global sovereign bonds, Canadian and real return bonds, commodities and a derivatives strategy for hedging purposes. The Balanced Portfolio holds a higher allocation of equity investments, with a higher potential for capital appreciation and volatility relative to the Conservative Portfolio.
"Many clients are asking for portfolios that generate competitive yields. However, reaching for yields carry some risks that may not be appropriate at retirement. We've created two new portfolios that are explicitly designed to reduce the risk associated with higher yielding portfolios, and in the process, making them more appropriate for retirees," says Alain Bergeron, Senior Vice President, Investment Management and Team Lead of the Mackenzie Asset Allocation Team.