Reasons to invest in Pender's Balanced Fund?
1. Expert Team – a One Stop Solution
The fund combines the expertise of Pender’s three Portfolio Managers who not only run the fund, but are also owners:
- The equity portion of the fund is managed by Ken O’Kennedy who has over 19 years of experience and is one of the principles at Dixon Mitchell, which runs the Pender Canadian Equity Fund.
- Matt Shandro with over 15 years of experience is the portfolio advisor to the Pender Corporate Bond Fund and runs the fixed income portion.
- The small cap technology portion is managed by Pender’s David Barr who is manager of the Pender Small Cap Opportunities Fund and has over 10 years of experience.
2. Capital Preservation
The Pender Balanced Fund aims to earn dividend and interest income as well as capital appreciation. It invests in carefully selected equity securities and corporate debt issues. The goal of downside protection is one of the key attributes of the fund.
3. In-Depth Evaluation
Pender’s managers each have a rigorous evaluation method, which provide them with a thorough understanding of an investment candidate and its operating landscape. In-depth knowledge is key to assessing the level of risk associated with an investment, and this due diligence process aims to reduce the amount of volatility in the portfolio.
4. Rigorous Standards
Potential holdings must meet certain criteria. Primarily a company must have a business model that can survive the current economic crisis by generating free cash flow and/or have undervalued assets that are not recognised by the market.
5. Cushion to Volatility
In the current climate it is difficult to choose between stocks and bonds. Economic analysts have observed that equity markets are highly volatile and fixed income markets could be at their peak.
The expert team managing Pender’s Balanced Fund aims to make investments that provide both downside protection in volatile markets, as well as optimizing the upside opportunity. Their approach is to carefully research and select holdings with a built-in margin of safety (discounted price, free cash flow, undervalued assets). In addition the asset allocation can be flexed according to market conditions so, when beneficial, the portfolio managers can increase the fixed income portion to 60%.
6. Sector Allocations
The fund has been weighted in the following way:
- Equity allocation - Lower commodities weighting, higher energy exposure; selective large cap US stocks in sectors not well represented in Canada
- Debt allocation - Corporate debt with a focus on non-investment grade issues.