Markets are under constant evolution and traditional investing strategies are proving to be ineffective under certain circumstances. Challenge the status quo with the NBI Unconstrained Fixed Income Fund and consider a strategy that invests broadly across global fixed income markets and is not constrained by benchmark-specific guidelines.
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Optimize your returns and preserve your capital with Janus Capital Management LLC
The NBI Unconstrained Fixed Income Fund’s Portfolio manager, Janus Capital Management LLC (“Janus”), seeks to optimize clients’ returns and preserve capital in a variety of market environments, through a broad range of managed investments solutions within fixed income, equity, alternative and multi-asset strategies.
- Founded in 1969
- US$137.5 billion in assets under management as of September 30, 2016
- 189 investment professionals and 57 investment professionals with over 20 years of industry experience
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Why invest in an unconstrained strategy?
Traditional fixed income may not be as compelling in a rising rate environment. With yields at historical lows and the unclear timing of rate hikes, investors need to consider investing in non-traditional strategies with greater flexibility to manoeuver in an increasingly complex market environment.
See an example of a global unconstrained fixed income allocation
How does an unconstrained fixed income fund differ from a traditional approach?
- Traditional active fixed income strategies seek to outperform their respective benchmarks by making tactical calls on both duration and sector positioning. However, margins to manoeuver are generally limited.
- Unconstrained fixed income strategies have greater flexibility when it comes to selecting and allocating securities, sectors and countries as they are not subject to restrictions related to a “traditional” benchmark such as the Barclays Global Aggregate or FTSE TMX Canada Universe.
- The portfolio's duration can also be adjusted with greater flexibility than traditional fixed income strategies.
- Overall, an unconstrained approach can better react to market fluctuations. It also provides greater flexibility in generating positive absolute returns while managing risk in changing global markets.
What are the benefits of investing in an unconstrained fixed income strategy?
- Broader opportunity set and range of potential alpha sources.
- Benchmark-agnostic: not constrained by a “traditional” fixed income benchmark.
- More flexibility to take advantage of the best opportunities and adjust the portfolio to enhance returns and mitigate risk.
- More leeway in terms of duration management which may help to attenuate interest rate risk, a distinctive advantage in a rising rate environment.
- Low correlation to traditional and spread-oriented bond and equity indices.
- Good complement to traditional fixed income and alternative strategies.
- Consistent, attractive risk-adjusted returns in all market environments.
- Integrated risk management process: focus on preserving capital and maximizing risk-adjusted returns.
How to position an unconstrained fixed income fund in a portfolio?
An unconstrained fixed income fund can be added to an existing core allocation, as a complement to traditional fixed income funds, due to its global exposure and potential for lower interest rate sensitivity.
- Diversification within fixed income allocation
- Alternative to passive fixed income strategies
- Hedge against rising rates
An unconstrained fixed income fund can be positioned as an alternative allocation, due to its potential lower correlation to traditional stocks and bonds.
- Aim to generate alpha regardless of market conditions using broader opportunity set
- Targeting absolute return with focus on capital preservation
Why invest in the NBI Unconstrained Fixed Income Fund?
Seeking to achieve absolute risk-adjusted returns in a variety of environments
The unconstrained approach allows the management team to avoid areas of the market posing greater downside risk and be more responsive to changes in markets. The portfolio is built by maintaining a stable, liquid assets base combined with a dynamic set of risk-mitigating and return-enhancing trades.
Source: Janus Capital Management LLC
NBI Unconstrained Fixed Income Fund Codes
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The NBI Unconstrained Fixed Income Fund (the “Fund”) is offered by National Bank Investments Inc., a wholly owned subsidiary of National Bank of Canada. Janus Capital Management LLC acts as portfolio manager for the Fund. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the Fund before investing. The Fund’s securities are not insured by the Canada Deposit Insurance Corporation or by any other government deposit insurer. The Fund is not guaranteed, its values change frequently and past performance may not be repeated.