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New Study Shows Canadian Institutional Investors Embracing New Areas of Fixed Income in their Portfolios

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TORONTO, May 24, 2022 (GLOBE NEWSWIRE) — A new study conducted recently by Coalition Greenwich and commissioned by AGF Investments found that Canadian institutional investors remain deeply committed to having fixed income assets in their portfolios, but recognize a need to diversify beyond government and investment-grade corporate bonds to less traditional sources of yield that offer the potential of higher returns.

“It’s important for us to continue hearing directly from institutional investors about their appetite for fixed income investments,” said Karrie Van Belle, Chief Marketing & Innovation Officer, AGF Investments. “Not surprisingly in today’s low interest rate environment, greater emphasis is being placed on higher-yielding assets like private credit and strategies that allocate beyond government and investment-grade corporate bonds toward high-yield and EM debt.”

“At AGF, we remain committed to ensuring our institutional offerings align with investor preferences and provide access to the asset classes and strategies that meet their evolving needs,” Van Belle added.

Results from the Coalition Greenwich 2022 Fixed Income Investing Study (read the accompanying Whitepaper here) showed that asset owners continue to look to fixed income investments to manage volatility (67-88%), diversify away from equities (67-74%) and preserve capital (50-65%).

But the findings also show that, in a time of low interest rates, more emphasis is being placed on higher-yielding assets like private credit and strategies that allocate beyond government and investment-grade corporate bonds toward high-yield and EM debt.

Given the choice of several options known to provide higher potential yields, the majority (52%) of respondents cited core plus strategies that typically invest in a mix of government and investment-grade corporate bonds that are complemented by smaller allocations to high-yield, global and EM debt. Moreover, this preference is just as evident in the relatively high percentage of responses mentioning both high yield (32%) and EM debt (23%) more specifically.

Private credit is another highly sought-after investment of institutions seeking more yield, in particular for public and corporate pension plans. In fact, the study found that 42% of respondents prefer private credit for its higher yield and the diversification it brings to a portfolio.

The study also showed that asset owners are cognizant of the risks associated with higher-yielding assets and are seeking out the most experienced and knowledgeable asset managers to help them strike the right balance. When asked to rank the most important attributes of a fixed income manager, team composition & capabilities and length of track record are both considered crucial to respondents, scoring 4.55 and 4.23 out of 5, respectively.

To view more survey findings, read the AGF Whitepaper.

Methodology

Coalition Greenwich conducted 31 telephone interviews targeting corporate pensions, public pensions, and endowments and foundations based in Canada to examine investors’ evolving sentiment toward fixed income investments and current thinking about portfolio implementation. The interviews took place during February and March of 2022. The study that this report is based on was commissioned by AGF Investments and conducted by Coalition Greenwich, a division of CRISIL.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With over $40 billion in total assets under management and fee-earning assets, AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

Media Contact

Amanda Marchment
Director, Corporate Communications
416-865-4160
amanda.marchment@agf.com


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