How income works in a low interest rate reality

A recipe for returns and sustainable yield with Leith Wheeler’s Jim Gilliland

Michael Ryval 19 December, 2019 | 1:15AM

Waterfall

Fears of a global recession, which began in 2018, are beginning to crest, argues Jim Gilliland, president and CEO of Vancouver-based Leith Wheeler Investment Counsel Ltd. Yet interest rates have also declined appreciably, making it more challenging to generate income for investors.

“We were in a manufacturing-led slowdown in 2019, which is not that dissimilar from the slowdowns in 2011 and 2015,” says Gilliland, lead manager of the 3-star rated $76.8 million Leith Wheeler Income Advantage Fund. “In each of those [slowdowns], we were fortunate that they were not substantive enough to cause a significant retraction in terms of employment. We are now far enough into the slowdown that we are gaining confidence that it will be a similar result. Meanwhile, central banks have moved from tightening to easing and are much more stimulating in terms of supporting economies.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian Tire Corp Ltd Class A128.67 CAD0.00
Leith Wheeler Income Advantage Sr F10.00 CAD0.36
Royal Bank of Canada94.32 CAD0.00
TELUS Corp23.67 CAD0.00
The Toronto-Dominion Bank60.92 CAD0.00
Toromont Industries Ltd75.19 CAD0.00

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Michael Ryval  

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