Fund Overview
This fund is designed for investors who…
- Seek steady income and diversification of their assets.
- Are concerned with security and capital growth and whose risk tolerance is low.
Investment Objectives
- Achieve steady income and ensure invested capital preservation.
- Invest primarily in debt instruments of Canadian and foreign issuers.
- May also invest in equity securities of Canadian and foreign issuers paying dividends or income.
Fund Facts are published once a year. Read them now.
Summary
Volatility:
Low Category: Canadian Bond
Start Date: March 31, 1978
RRSP Admissibility: yes, 100% eligible
Benchmark:
- 50% DEX short term
- 50% DEX mid-term
Assets*: $251 455,644
Number of Securities: 85
Target Asset Mix
- Bonds: 100%
- Short Term: 0%
*As at April 30, 2024
Portfolio Management
Managers
- Professionals’ Financial – Mutual Funds Inc.
Main Securities as at September 30, 2024
| Province of Ontario 2.05% 02-JUN-2030 | 4.9% |
| Province of Ontario 4.15% 02-JUN-2034 | 4.1% |
| Canada Treasury Bonds 1.75% 01-DEC-2053 | 3.5% |
| Province of Quebec 3.25% 01-SEP-2032 | 3.4% |
| Province of Quebec 1.9% 01-SEP-2030 | 3.4% |
| Bank of Nova Scotia 5.5% 08-MAY-2026 | 3.3% |
| Province of Ontario 2.9% 02-JUN-2049 | 3.1% |
| Province of Ontario 3.5% 02-JUN-2043 | 3.1% |
| Province of Quebec 3.5% 01-DEC-2045 | 2.8% |
| Province of British Columbia 3.2% 18-JUN-2032 | 2.7% |
| Province of Ontario 4.6% 02-JUN-2039 | 2.6% |
| Federation des caisses Desjardins du Quebec 5.467% 17-NOV-2028 | 2.6% |
| Bank of Montreal 4.709% 07-DEC-2027 | 2.5% |
| Province of Quebec 5.0% 01-DEC-2041 | 2.3% |
| Canadian Imperial Bank of Commerce 4.9% 02-APR-2027 | 2.3% |
| Province of Ontario 3.65% 02-JUN-2033 | 2.1% |
| Canada Treasury Bonds 3.25% 01-DEC-2034 | 2.1% |
| Toronto-Dominion Bank 5.491% 08-SEP-2028 | 2.0% |
| Toronto-Dominion Bank 4.344% 27-JAN-2026 | 1.9% |
| Royal Bank of Canada 5.341% 23-JUN-2026 | 1.9% |
| Bell Telephone Company of Canada 5.15% 14-NOV-2028 | 1.8% |
| National Bank of Canada 4.982% 18-MAR-2027 | 1.8% |
| Province of Quebec 5.0% 01-DEC-2038 | 1.6% |
| Canada Treasury Bonds 1.25% 01-JUN-2030 | 1.5% |
| Canadian Imperial Bank of Commerce 5.05% 07-OCT-2027 | 1.5% |
| Net asset value as at September 30, 2024 | 290 M $ |
Returns
Returns *
* Returns for the first and last year are not annualized
* Non annualized return
$1,000 Invested Amount since inception
Note that the results shown are for information purposes only. Commissions, trailing commissions, management fees and expenses all may be associated with investments ins FDP Portfolio’s. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns, including changes in portfolio value and reinvestment of all distributions, but do not take into account sales, redemption, distribution or optional charges or income taxes payable by an investor that would have reduced returns. References to indices are for information purposes only. Comparisons with indices may vary according to the portfolio size, investment timing, and mandate objective. The funds’ securities are not insured by the Canada Deposit Insurance Corporation. Mutual funds are not guaranteed, their value changes frequently, and past performance may not be repeated.
Managers' Comments
The FDP Canadian Bond Portfolio, Series A posted a net return of -0.5% for the first six months of 2024, versus 6.6% for 2023.
The bond market, as measured by the FTSE Canada Universe Bond Index, posted a -0.4% return for the first six months of 2024. The index’s slightly negative return is mainly attributable to lowered expectations of interest rate cuts by the Bank of Canada (BoC), though the impacts were mitigated by narrowing credit spreads.
Since the beginning of 2024, the U.S. Federal Reserve (Fed) and BoC have maintained a restrictive monetary policy and kept their rates high (the BoC implemented a single 25 basis point cut while the Fed left rates unchanged) in an effort to tackle inflationary pressures that have persisted since 2022. These policies are now on track to reach their goals as inflation is approaching target levels. Central banks’ actions of central banks demonstrate their ability to cool the economy and bring down inflation, but the labour market’s enduring strength and consumers’ resilience continue to postpone a return to a neutral monetary policy.
The yield curve, which inverted in 2022, remained inverted over the first six months of 2024. Additionally, credit spreads have generally narrowed since the beginning of the year for both provincial and corporate bonds, continuing a trend that began in 2023. This reflects the easing fears of a recession and investor optimism about central banks’ ability to manage inflation while achieving a soft landing of the economy.
On a relative basis and gross of management fees, the FDP Canadian Bond Portfolio outperformed its benchmark index thanks to its curve positioning and overweight to corporate bonds. The Portfolio benefited from the steepening of the yield curve due to its underexposure to 30+ year maturities and its overexposure to 15–20 year maturities. Narrowing yield spreads and the Portfolio’s overexposure to corporate bonds (especially banking securities) and provincial bonds had a positive impact on relative performance.
