Our Current portfolio strategy is relatively unchanged:
- Under-weight fixed income relative to equities.
- Keep the average life of the bonds short term to minimized interest rate risk. Keep exposure to high-yield within the fixed income to enhance yield with less exposure to rising interest rates and low correlation to other asset classes.
- We have been looking to decreased our exposure to the U.S. due to higher valuations and strong U.S. Dollar. Weakness in Canadian markets also offered an attractive area to move some of the U.S. exposure into. The strong U.S. dollar has prevented us from adding to U.S. when new funds have been added. Rather than increasing U.S. our strategy has been to over-weight our Global Dividend strategy.
- The Guardian Global Dividend strategy is not only just over 55% U.S. exposure but also generates a yield of approximately 3.7%. The country mix is most attractive while having approximately 55% U.S. exposure and 45% other countries. We felt this would offer protection in the event of the U.S. dollar weakening.
- Portfolio strategy has been to have exposure to the dividend payer to add a cushion during weak stock performance periods. Portfolios have been balanced across countries and sectors. The dividend yield has been in the 3.5% to 4.0% range. This range suggests there is opportunity in our portfolios to also benefit from capital appreciation – not just the dividend. The environment may be changing and our strategy of being adaptive has resulted in portfolios being well positioned with a balance of growth and income characteristics.