A Gold-rated choice for corporate bonds

This Morningstar Medalist puts its freedom to good use.

Jeffrey Bunce, CFA 11 July, 2016 | 5:00PM
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The managers of Lysander-Canso Corporate Value Bond look to add value through corporate credit selection and will invest in a concentrated mix of investment-grade and high-yield bonds. The fund technically fits in the Global Fixed Income category because of its large weighting outside of Canada (39% as of March 31, 2016), but management follows an unconstrained approach, investing wherever the best risk-reward trade-off can be found. This go-anywhere approach, coupled with a large, experienced team that is willing and able to examine out-of-favour and deeply depressed credits, results in a Morningstar Analyst Rating of Gold.

Canso's team of 28 investment professionals is led by CIO John Carswell, a 30-year veteran of fixed-income investing who has specialized in corporate debt for most of this time. With its size and focus on the credit analysis of companies, the Canso team delves deep and gets to know companies and their debt instruments better than most. Because of this, management will take on credit opportunities that other firms generally won't touch, which is a distinct advantage versus peers.

The team sources ideas in a number of ways, some of which are more unique than others. For instance, team members will look at credits that have been recently downgraded or look at companies in the news and out of favour. They are also proactive; they attempt to anticipate the funding needs of companies and then participate in the structuring of debt issues to acquire favourable terms.

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About Author

Jeffrey Bunce, CFA

Jeffrey Bunce, CFA  Jeffrey Bunce, CFA, is a senior investment analyst for Morningstar’s Investment Management group.

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