Sr Portfolio Manager
With vaccinations under way, assets rallied in November, benefitting Amplus Fund with another solid month in performance. Read more in the latest commentary from portfolio manager Andrew James Labbad.
As days keep getting cooler, I hope you are keeping well and looking forward towards holiday festivities as much as I am. Our latest update is excited to report Amplus Credit Income Fund closed +3.02% for the month of November and is now up +17.12% since inception July 2nd after costs.
As we highlighted in our previous newsletter, November was off to a hot start. The rally in most asset classes was underpinned by a wave of positive vaccine news, as well as a strong earnings season highlighting the strength and resilience of the consumer. The U.S. election came and left without affecting the overall market tone. Avoiding a “Blue Wave” outweighed Trump’s stubbornness to admit defeat. Investors finally had many reasons to overlook near-term economic and political headwinds for a brighter path forward. Fixed income indices recovered from last month’s losses and gained generally 1% for the month of November. Equities played catch-up, gaining just over 10.5%.
We would like to spend some time reminding investors that the goal of Amplus is to consistently participate in market upside while protecting investors from market risk on the downside. So far, we have achieved just that. While returns from most equity indices are now comparable to Amplus, one must remind themselves that Amplus saw steady, consistent gains since its inception.
Reinforcing this goal was our decision to remain prudent and play defensive going into November’s uncertainty surrounding the U.S. elections. Despite that, we managed to produce great returns for our investors. Our security selection paid dividend and outperformed the general market. In the beginning of the month, we chose to highlight one of those investments – CT REIT. Since publishing the article, CT REIT debt has rallied close to 75 basis point (bps) outperforming the general market by 3x in just over one month. We are delighted by the results it produced for our investors.
We remain cautiously optimistic on credit going into 2021. Fundamentals remain strong, consumer spending remains strong, central banks remain accommodative with many tools at their disposal to ensure markets remain upbeat. Biden at the helm is a good change for the market at this stage of the pandemic. We expect more stimulus, more social aid, and more awareness towards limiting the spread of COVID-19. Including the help of vaccines, I am hopeful that we will reach the peak of COVID-19 soon.
Let us end this newsletter rehashing last month’s comment. Negative yielding debt globally remains at record highs, still close to $17 trillion, making the incentive to recycle overseas cash into USD and CAD fixed income an obvious choice for international buyers. Since mentioning it, markets have seen consistent overnight buying of Canadian and U.S. denominated debt. We remain confident that international buyers with deep pockets can keep the momentum going well into 2021. This is very good for the positioning of our portfolio.
Thank you for your support and interest in Amplus. I would love the opportunity to answer your questions and discuss investing further with you.
Historic low rates and unprecedented quantitative easing from central banks have created ample opportunities of market spreads divergence globally. Amplus Credit Income Fund aims to maximize positive risk-adjusted returns in a rising market, while protecting investors from market risk in a downturn. By employing a diverse arsenal of investment strategies, Amplus is designed to capitalize on market inefficiencies and mispricing while minimizing interest rate exposures.
Amplus Credit Income Fund subscribes to a flexible investment style with primarily debt securities such as bonds, preferred shares, and convertible notes. We have the global relationships to invest in different currencies, taking advantage of the best value.View Fund