EdgePoint Opportunistic Credit Portfolio
A concentrated portfolio that seeks to provide long-term capital appreciation and income generation by investing primarily in corporate debt. The Portfolio may also invest in preferred shares, warrants, common shares and other financial instruments. On February 1st, 2023, EdgePoint Variable Income Portfolio was renamed to EdgePoint Opportunistic Credit Portfolio. We believe the new name better reflects the profile of the Portfolio. The investment strategy, approach and objectives remain the same.
Portfolio Characteristics
Portfolio yield
Dividend yield
Yield to maturity
Number of holdings
Number of holdings (Equity)
Number of holdings (Fixed-income issuers)
Duration
Weighted avg. coupon
Risk profile - Based on the Canadian Securities Associationʼs mutual fund risk classification methodology. EdgePoint may exercise its discretion and assign the Fund a higher risk classification than indicated by the CSA methodology.
Portfolio Information
Start date
Minimum investment: Individual or joint accredited investors
Purchase frequency
Category
Redemption frequency
Distributions
Performance fee
NAV frequency
Performance fee structure
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.
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).
| Calendar-year total return | Tier fee (% of return) | |
|---|---|---|
| < 0% | 0% | |
| Tier 1 | 0% to %5 | 10% |
| Tier 2 | > 5% | 20% |
Investment approach
The Portfolio seeks to provide long-term capital appreciation and income generation by investing primarily in corporate debt.
The opportunity
We believe that a bottom-up, fundamental investment approach like ours is well positioned to take advantage of mis-pricings caused by volatility.
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
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.
Alex O'Hara, Andrew Pastor, Claire Thornhill, Derek Skomorowski, Frank Mullen, Geoff MacDonald, Jason Liu, Jeff Hyrich, Steven Lo, Sydney Van Vierzen, Tracey Chen, Tye Bousada
Portfolio Allocation
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.
| Series | Fund code | Performance fee |
|---|---|---|
| PF | EDG909 | See performance fee structure below |
Performance fee structure
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.
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).
| Calendar-year total return | Tier fee (% of return) | |
|---|---|---|
| < 0% | 0% | |
| Tier 1 | 0% to %5 | 10% |
| Tier 2 | > 5% | 20% |
| Date | Closing price |
|---|
| Date | Income | Capital Gains | Total |
|---|
EdgePoint Opportunistic Credit Portfolio, Series PF: YTD: 1.37%; 1-year: 3.34%; 3-year: 7.59%; 5-year: 7.46%; Since inception (Mar. 16, 2018): 7.39%.
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. As such, we place little value in the short-term investment results shown.
| Series | YTD | 1-Year | 3-Year | 5-Year | Since Inception |
|---|
| Series | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018* |
|---|
Want to know more about EdgePoint Opportunistic Credit Portfolio (the “Portfolio”)? Read below for answers to some of our most frequently asked questions.
About the Portfolio
What’s the Portfolio’s structure?
The Portfolio is a mutual fund trust only available by offering memorandum. That means that eligible investors must qualify under an exemption such as:
Accredited investor exemption
Individuals who have at least $1 million in financial assets (excludes real estate) on their own or combined with their spouse
Individuals with net assets of at least $5 million (includes real estate) on their own or combined with their spouse
Individuals whose annual net income before taxes exceeds $200,000 in the last two years ($300,000 when combined with spouse’s net income) and expected to exceed $200,000 in the current year
Current or former individuals registered as a representative of a Securities Advisor or Dealer (in Canada)
A company with net assets of at least $5 million on most recent financial statements
A company whose owners are accredited investors
Minimum amount investment exemption
Corporations or other entities with a minimum purchase of $150,000
Exemption not available to individual investors
Residents of British Columbia or Newfoundland and Labrador
Individuals who sign a risk acknowledgment form
Meet the minimum purchase requirement
What’s the Portfolio’s mandate?
It’s a concentrated portfolio that seeks to provide long-term capital appreciation and income generation by investing primarily in corporate debt. The Portfolio may also invest in preferred shares, warrants, common shares and other financial instruments.
How often is the Portfolio’s NAV calculated?
Monthly.
NAVs are calculated on the last business day of the month, but there are several disclosure lags:
1-day lag – performance calculations and pricing for unique fixed-income holdings
2-day lag – to view positions and update valuation on the dealer side.
What’s series accounting?
The Portfolio uses a series-based accounting method to calculate performance fees. This approach ensures fairness, as each unitholder pays a performance fee based solely on their individual purchase date and corresponding performance experience. Performance fees are charged only when returns are positive.
Why are units switched into another series?
The Portfolio uses a series-based accounting method to calculate performance fees. Each unitholder pays a performance fee based solely on their individual purchase date and corresponding performance experience. Performance fees are charged only when returns are positive.
How it works
Investments are initially made into a lead series and are then immediately switched on a non-taxable basis into the monthly purchase series. Subsequent Portfolio purchases made in the same year follow the same process for the month of purchase.
The monthly subseries’ are temporary. At the end of the December 31 performance period, units are consolidated back into the lead series by a non-taxable switch.
Because the lead series and all monthly sub-series represent the same underlying investment, switches between them do not trigger a gain or loss.Why does the adjusted cost base (ACB) appear incorrect after a subsequent purchase?
The ACB is tracked separately for each series. When you make a subsequent purchase into the lead series (EDG909), the new purchase is averaged with your existing holdings to calculate a new ACB per unit.
The averaged ACB is then used when units are switched out of the lead series into the monthly purchase series.ACB calculation example (EDG909)
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The monthly subseries’ are temporary. At the end of the December 31 performance period units are consolidated back into the lead series by a non-taxable switch and the ACB will be consolidated.
Fees
What’s the Portfolio’s fee structure?
There is no management fee. Other than operating expenses of 0.05%, only performance fees are charged.
EdgePoint is only compensated if we make Portfolio investors money. A performance fee is 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).
To calculate the fee for each investor, we rely on series accounting where multiple portfolio series are created based on purchase date and a tiered structure.Performance fees
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* Intra-year purchase returns are from the month of purchase.
How is the performance fee calculated?
The performance fee is calculated annually at calendar-year end and is charged only if the NAV (adjusted for distributions) exceeds the high water mark.
The high-water mark is the higher of:The initial purchase price, or
The highest prior year end NAV (adjusted for distributions)
Although the fee is charged at year-end, it’s accrued monthly within the NAV for each series. At year end, a true-up occurs to reconcile accrued fees with the actual fee owed based on annual performance.
If performance is negative, no fee is charged.
To calculate the fee for each investor, we rely on series accounting where multiple portfolio series are created based on purchase date and a tiered structure.
Performance fees
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* Intra-year purchase returns are from the month of purchase.
Example: $20,000 investment / 6% annual return / $21,200 year-end market value
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Effective performance fee rate is 0.66% ($140/$21,200).
Is there a trailer fee?
No. The Portfolio doesn’t have any trailer fees since it’s “no load”. Advisors may be compensated only through fee-based accounts.
Are units sold to cover the performance fee?
Units aren’t sold to pay the performance fee. The fee is embedded directly in the NAV of the specific monthly series held.
Do the Portfolio’s fees have to be reported under CRM3 Total Cost Reporting (TCR)?
The Portfolio is an exempt market product and currently exempt from TCR reporting requirements.
Purchasing or redeeming the Portfolio
Who can purchase the Portfolio?
The Portfolio is a mutual fund trust only available by offering memorandum. That means that eligible investors must qualify under an exemption such as:
Accredited investor exemption
Individuals who have at least $1 million in financial assets (excludes real estate) on their own or combined with their spouse
Individuals with net assets of at least $5 million (includes real estate) on their own or combined with their spouse
Individuals whose annual net income before taxes exceeds $200,000 in the last two years ($300,000 when combined with spouse’s net income) and expected to exceed $200,000 in the current year
Current or former individuals registered as a representative of a Securities Advisor or Dealer (in Canada)
A company with net assets of at least $5 million on most recent financial statements
A company whose owners are accredited investors
Minimum amount investment exemption
Corporations or other entities with a minimum purchase of $150,000
Exemption not available to individual investors
Residents of British Columbia or Newfoundland and Labrador
Individuals who sign a risk acknowledgment form
Meet the minimum purchase requirement
What is the Portfolio’s fund code?
The fund code for purchases is EDG909.
What’s the minimum investment amount?
Minimum investment
$20,000 for accredited individual or joint investors
$150,000 for non-individual investors
Subsequent investment
$1,000 for accredited individual or joint investors
$1,000 for non-individual investors
(An account value of $150,000 initial purchase cost or market value must be maintained for non-individual investors)
What are the distribution options?
There are two distribution options:
Reinvest
Cash
Distributions are automatically reinvested unless the cash option is selected at the time of order entry.
Can the Portfolio be purchased by a corporation/entity for less than $150,000?
Yes, provided that:
The beneficial owners qualify as accredited investors under category “t” of the subscription agreement, or
The entity has at least $5 million in net assets based on its most recent financial statements.
What’s the settlement date?
The settlement date is T (last trading day of the month) +2.
What’s the purchase frequency?
The Portfolio is priced monthly on the last business day of each month.
There is a 1-day lag before the NAV is available. This is to ensure accurate pricing due to some of the unique fixed-income holdings and to account for performance fee calculations for each series.
Why can’t I see the month-end NAV?
There is a 1-day lag before the NAV is available. This is to ensure accurate pricing due to some of the unique fixed-income holdings and to account for performance fee calculations for each series.
What’s the redemption frequency?
Redemptions are processed quarterly, on the last business day of the month. Redemption requests must be submitted no later than 15-business days before the last day of the quarter.
Are there early redemptions fees?
Early redemption fees may apply:
Year 1: 2% of market value
Year 2: 1% of market value
Administrative
What documentation do I need to purchase the Portfolio?
The necessary documentation is based on the type of purchaser:
Discretionary advisors
Accredited investors/entities (see Who can purchase the Portfolio? for additional details)
Discretionary advisor
Subscription Agreement (completed once by the advisor)
Bulk Order Form listing all discretionary purchases for the month
Accredited investors/entities
First purchase – A Subscription Agreement is required for all first-time investors. These agreements are completed at the purchaser level, not the account level. Purchasers may be individual, joint, or non-individual.
Subsequent purchases – A Subsequent Subscription Agreement is required for additional purchases which is a shorter one-page document.
When do I need to submit completed purchase agreements?
Purchase documents must be submitted at or before trade placement, and no later than 4:00 p.m. (EST) on the last business day of the month.
Where do I send completed purchase agreements?
Do I need a subscription agreement if an existing client buys in a joint account?
Yes, a new initial subscription agreement is required because the account registration is changing.
Do I need a subscription agreement for each account type if it's the same client?
No. Since agreements are completed at the purchaser level, not the account level, only one subscription agreement is required with a consolidated purchase amount.
Why isn’t my client’s purchase of the Portfolio reflected on my dealer system?
The Portfolio is priced monthly portfolio with a T+2 settlement cycle.
Why haven’t I received my advisory fee for the Portfolio?
The Portfolio has a quarterly redemption feature, so monthly advisor fees are reflected only at quarter end. For this reason, we recommend collecting advisory fees from a different holding.
Offering Memorandums
View this version if you are investing as a non-accredited investor in British Columbia or Newfoundland and Labrador. Speak with your financial advisor to determine suitability for your specific situation.
Subscription agreements and forms
Non-discretionary accounts
Discretionary accounts