Investment Strategy
The Fund seeks to gain exposure to Long-term government bonds approximately equal to 3 times the cash value of the Fund in order to provide a hedge against liabilities of an investor that are sensitive to changes in long-term interest rates. The composition of the Fund will generally be $1 of direct investment in physical bonds and $2 of synthetic bond exposure. The characteristics of the Fund are managed holistically, irrespective of physical or synthetic exposures, to help ensure that the overall Fund’s sensitivity to interest rate and provincial spread changes mirror that of the underlying benchmark. TD Asset Management Inc. considers general liquidity, administration, and cost when deciding whether any particular position will be held physically or synthetically, and what instruments to use within the synthetic portion.
Investment Objective
The investment objective of the Fund is to provide exposure to long-term provincial bonds approximately equal to 3 times the cash value of the Fund in order to provide a hedge against liabilities of an investor that are sensitive to changes in long-term interest rates.
Who Should Invest
The Fund is designed for Canadian pension funds seeking to better match the interest rate exposure associated with their pension liabilities by increasing their fixed income exposure.
Fund Facts
Long Fixed Income |
Active |
January 26, 2010 |
3x FTSE Canada Long Term Provincial Bond Index minus 2x one-month CDOR |