Strategies to Navigate a Rising Interest Rate Environment

Strategies to Navigate a Rising Interest Rate Environment

In this podcast, our CEO Mark Goodwin and Red Cedar Investment’s Chief Investment Officer John Cassady and Director of Portfolio Management David Withrow discuss the strategies they believe can enable income-oriented investors to navigate a rising interest rate environment.

Click here to read the transcript

This podcast was recorded April 8, 2021. The opinions expressed are those of the North Square Investments, LLC Investment Team. The opinions referenced are as of the date of publication and are subject to change without notice. This material is for informational use only and should not be considered investment advice.

Definitions for terms used in this podcast:

The Bloomberg Barclays US Aggregate Bond Index – A broad base, market capitalization-weighted bond market index representing intermediate term investment grade bonds traded in the United States. The index is often used by investors as a stand-in for measuring the performance of the US bond market.
Basis points – Are a commonly cited unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, and is used to denote the percentage change in a financial instrument.
Yield to call – A financial term that refers to the return a bondholder receives if the bond is held until the call date, which occurs sometime before the bond reaches maturity.
Additional Tier or AT-1 Bonds – Are a type of perpetual bonds that don’t have any expiration date, and which is issued to raise long term capital.
CoCos – Cocos are contingent convertibles, a debt security issued by European financial institutions. Contingent convertibles work in a fashion similar to traditional convertible bonds. They have a specific strike price that once breached, can convert the bond into equity or stock.
Upside/downside capture ratio – Measures the ratio of the upside and downside of an investment versus the benchmark index that the investment is compared to. This ratio should indicate how an investment typically performs in relation to its benchmark.

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Martin Gawne