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Market Insights

Why It's Time to Re-think Your Preferred Share Allocation

In the 2023 Federal Budget released in late-March, a surprising tax measure was proposed, where Canadian insurers will be expected to pay the full tax rate for common and preferred share dividends, treating them as ordinary business income. We believe losing the tax advantage of these instruments gives insurance companies another good reason to rethink their preferred share allocations. We believe actively managed fixed income solutions can deliver better risk-adjusted returns for P&C firms, with a much lower capital requirement.

A Holistic Approach to Managing Risk

Staying on Top of Risk in an Ever-Changing Market Environment
At RPIA, we believe risk management and hedging are critical elements of corporate credit investing. We seek to understand the varying risks in each underlying portfolio with precision, and then sell or hedge the specific sources of risk if our investors are not being adequately compensated for the cost of bearing them. In this paper, we review how we address explicit and unforeseen risks through our hedging program.

Putting the 'G' Back in ESG

The Importance of ESG Engagement by Fixed Income Investors
The recent failure of ESG darling, SVB, prompted an important discussion on the importance of making governance considerations a priority. Fixed income investors have growing influence to engage with issuers and strengthen governance practices. In this paper, we include a detailed example of our own engagement practices.

Sifting for Gems

Q1 2023 Newsletter
Financial instability and uncertainty from the bank liquidity crisis ignited further volatility in bond yields in the first quarter of the year. As we continue to monitor the far-reaching implications of recent events on growth and markets, we’ve recognized some opportunities amid the credit risk repricing.

The Tax Efficiency of Discount Bonds

Investor Education: Bonds 101
The unprecedented volatility in bond markets over the past two years has resulted in many bonds trading at discounts to their par values. These bonds can offer a tax-efficient approach to generating returns for investors over the coming years. We explain this through a hypothetical scenario and by comparing the after-tax returns for discount bonds vs. GICs.

The Fed Will Keep Going... Until Something Breaks

February 2023 Newsletter
2023 has been a year marked by extremes. In early March, the market was fixated on the possibility of central banks having to increase the “terminal rate,” but the collapse of Silicon Valley Bank and the potential financial contagion risks that emerged from it, resulted in the quickest interest rate repricing in nearly 40 years. We discuss our views on the impact on the financials sector specifically and the market environment broadly.

Nearing the Other Side of the Tightrope

January 2023 Newsletter
As the year begins on a hopeful note, the shift away from artificially low interest rates and liquidity-flushed markets is making this a credit-pickers market once again. In this newsletter, we discuss how our game plan is evolving and the emphasize need to be flexible, selective, and targeted in this environment.
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ESG Trends: Progress Over Perfection

While sustainability is the destination, transition is the way to get there.
As ESG factors become increasingly important to investment decisions, the focus has moved away from the binary distinction between brown and green bonds, to concentrating on incentivizing the transition from brown to green at the company level.

Keeping It Technical

January 2020 Commentary
While the new year started strong thanks to improving macroeconomic data, exogenous shocks such as Iranian-U.S. aggressions and the novel Coronavirus reintroduced volatility into the market.

Certain of Uncertainty

Q4 2019 Commentary
Given our flexible and highly active approach to investing, we are excited about the opportunities for the coming year – and we welcome the opportunity to differentiate ourselves from more traditional managers.

Battling Macro Headwinds

For Q3 2019 most of the volatility was driven by macroeconomic headlines.
This whitepaper investigates how macro headlines dominated the quarter with continued focus on China/US relations. We will continue to see monetary easing but don’t think negative rates are coming to North America.

Are Negative Rates Coming to North America?

The discussion in North America and the U.K. is different to what has driven negative rates in the Eurozone.
Louise Pitt Brindle, Head of Research at RPIA, provides commentary on possible negative rate events in the foreseeable future in North America.

All Risk and No Reward?

Searching for income in preferred shares
This article includes commentary on how low global yields have pushed investors to search for income wherever they can find it, including preferred shares, touted as fixed income-like instruments with higher yields.

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