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EdgePoint Variable Income Portfolio

A concentrated portfolio that seeks to provide long-term capital appreciation and income generation by investing in corporate debt and income producing equities.

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

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'HaraAndrew PastorClaire ThornhillDerek SkomorowskiFrank Mullen, Geoff MacDonald, George Droulias, Jason Liu, Jeff Hyrich, Jinhyung Kwon, Lee Matheson, Steven Lo, Sydney Van Vierzen, Tracey Chen, Tye Bousada

Portfolio Allocation

As at June 30, 2022

Portfolio Characteristics

As at June 30, 2022

Risk Profile Low
High
7.79%
Portfolio yield
3.01%
Dividend yield
8.45%
Yield to maturity
61
Number of holdings
14
Number of holdings (Equity)
47
Number of holdings (Fixed-income issuers)
3.23
Duration
6.84%
Weighted avg. coupon

Risk profile - Based on EdgePoint's assessment of risk, future annticipated investments and returns, and not on a historical standard deviation methodology.

Portfolio Information

March 16, 2018
Start date
$20,000
Minimum investment: Individual or joint accredited investors
Monthly (5-day notice)
Purchase frequency
Fixed Income
Category
$150,000
Minimum investment: Non-individual
Quarterly (15-day notice)
Redemption frequency
Quarterly
Distributions
None
Management fee
Monthly
NAV frequency

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.