The fund aims to provide capital growth and income through a strategic asset mix of Canadian and foreign equities, fixed income securities and money market instruments. The objective of the fund is to achieve superior long-term results at an acceptable and prudent level of risk. The fund exhibits a long-term bias towards equities as the best vehicle for superior returns. However, at any point in time the profile of the fund may be significantly different from the benchmark, depending on market conditions. This latitude around the benchmark allows BonaVista to manage through a wide variety of economic environments.
Within the equity sector, we measure our portfolios in Canada, the US and international markets against each other, placing the greatest emphasis on the areas that offer the best relative value. Since the same investment approach is applied to each of these portfolios, we are able to make rational and effective valuation judgments across countries and continents. Over time, we expect our equity holdings to drive the fund’s long-term returns.
At the same time, the fixed income market’s prospects are evaluated, considering both current and anticipated levels of interest rates, and the point in the business cycle. While bonds can outperform equities over defined periods of time, their most important contribution is to lower the risk of the fund. Consequently, the investment approach is relatively conservative, emphasizing the preservation of capital.
US equities are managed by Phillips, Hager & North Investment Management Ltd. and international equities are managed by Sprucegrove Investment Management Ltd.