Edgepoint Edgepoint2

EdgePoint Variable Income Portfolio
Overview
Investment approach
The Portfolio seeks to provide long-term capital appreciation and income generation by investing in corporate debt and income producing equities.

The opportunity

We believe that a flexible capital base can generate attractive opportunities in today’s environment. Low interest rates have created a complacent environment and caused many investors to take more risk in their portfolios. Changes in the economic environment, business fundamentals, credit spreads, or interest rates should lead to increased levels of volatility.

We believe that a bottom-up, fundamental investment approach like ours is well positioned to take advantage of mis-pricings caused by volatility.

Even in the current ultra low-rate environment, the portfolio is designed to generate attractive fixed income returns, while conservatively managing interest rate and credit risk. There is always a business that’s out of favor or misunderstood and we aim to identify these opportunities and develop a proprietary insight about them.

We believe the portfolio is attractive both on a standalone basis and relative to its alternatives and credit indices. Our portfolio is not managed like an index – it is concentrated in our best ideas, which will likely result in a unique collection of investments in different parts of the capital structure. At the same time the portfolio is diversified by business idea as we go to great lengths to ensure that the underlying drivers of the businesses are not based on the same or similar ideas.

Our approach

The Portfolio was created to use our skillset at analyzing business and take advantage of opportunities across the capital structure. We seek fixed-income securities that provide an attractive return through coupon payments and capital appreciation. Since corporate bonds are not traded on exchanges, they can be more prone to pricing inefficiencies. We believe that a skilled credit manager can turn these inefficiencies into opportunity.

Learn more about our investment approach

Portfolio characteristics
As at March 31, 2020
Number of holdings
59
Portfolio yield1
11.35%
Number of holdings (Equity)
16
Dividend yield2
4.74%
Number of holdings (Fixed-income issuers)
43
Yield to maturity3
12.21%
Duration4
2.79
Weighted avg. coupon
6.89%
1Portfolio yield is the market-weighted average of the current yield of the fund's fixed income component and the dividend yield of the fund's equity component.
2Dividend yield is the total projected annual income generated by owned equities relative to their market capitalization.
3Yield to maturity is the anticipated total return for bonds held until maturity with coupon payments consistently reinvested.
4Duration is a measure of the fund's fixed-income price sensitivity to interest rate changes.
Portfolio information
Start date
March 16, 2018
Category
Fixed Income
Fee
There is no management fee. Only performance fees are charged (other than operating expenses), which better aligns us with our investors. In other words, we don’t make any money unless the performance goals are met.
Minimum investment
Accredited investor $50,000, Qualified, non-individual $150,000
Distributions
Quarterly
NAV frequency
Monthly
Purchase frequency
Monthly (5-day notice)
Redemption frequency
Quarterly (15-day notice)
EdgePoint of view
Investment results: We measure investment success over periods of ten years or more and believe it takes considerable skill to consistently add value over the long term.

Structure: The offering memorandum structure provides two distinct advantages: a flexible mandate and the ability to manage liquidity as the Portfolio can only be redeemed quarterly.

Investment team

Your investment team brings diverse investment experience, perspectives and skills to the table. They work together, take ownership of their investment ideas and tap into their past experiences where they fulfilled a variety of diverse mandates. Their team-based mindset also allows them the time and freedom to conduct the kind of extensive legwork required to really get to know a business inside and out.

Click below to find out more about the team's members.

Andrew Pastor, Claire ThornhillDerek Skomorowski, Frank Mullen, Geoff MacDonald, George Droulias, Jason Liu, Steven Lo, Sydney Van Vierzen, Ted ChisholmTracey Chen, Tye Bousada

Series Fund code Management fee Fee Operating expenses
XManagement fee:
This component of the MER is what you pay us and your financial advisor for investment and financial services.
XMER:
A management expense ratio (MER) is what you pay to own a mutual fund. This fee compensates EdgePoint and your financial advisor for a range of services including operational costs and taxes. It's not charged directly to you but deducted from your investment returns.

Figures as at December 31, 2019.
XTER:
The trading expense ratio (TER) represents the trading expenses incurred by the Portfolio. These expenses aren't included in the MER but they're still costs borne by the investor and reduce returns. The total cost of ownership is the sum of the MER plus the TER.

Figures as at December 31, 2019.
XThis fee compensates EdgePoint for a range of services including operational costs and taxes.
PF EDG909 There is no management fee. Only performance fees are charged (other than operating expenses), which better aligns us with our investors. In other words, we don’t make any money unless the performance goals are met. 0% if return is negative
10% of profits of return between 0% and 5%
20% of profits of return above 5%
0.20%
Returns measured on an annual basis.
A performance fee will be calculated and charged at the end of each calendar year only when the NAV (adjusted for distribution) exceeds the previous high water mark. The high-water mark is the higher of initial purchase price or highest previous calendar-year-end NAV (adjusted for distribution).
DATE
RETURNS AS AT
DATE
Portfolio Documents
Commentary
EDGE Facts
Quarterly snapshot of the Portfolio’s holdings and performance.
Offering memorandum