For over 40 years Canadian interest rates have been declining. While investors have enjoyed the ride down, the new rate environment presents new challenges:
With interest rates at historic lows, it is increasingly difficult to generate adequate returns.
A rising interest rate environment could lead to investors incurring material losses.
Given the risk/reward profile, traditional fixed income is no longer an attractive diversification option.
The benchmark Canada Universe Bond Index is yielding 1.9% while a 1% increase in rates could lead to a 8.4% loss.*
*As at February 17th, 2022, based on modified duration Source: FTSE
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Who qualifies as an accredited investor?
An individual who, alone or together with a spouse, owns financial assets worth more than $1,000,000 before taxes but net of related liabilities or An individual, who alone or together with a spouse, has net assets of at least $5,000,000
An individual whose net income before taxes exceeded $200,000 in both of the last two years and who expects to maintain at least the same level of income this year or An individual whose net income before taxes, combined with that of a spouse, exceeded $300,000 in both of the last two years and who expects to maintain at least the same level of income this year
An individual who currently is, or once was, a registered adviser or dealer, other than a limited market dealer
Financial institutions
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Registered charities
Certain mutual funds, pooled funds and managed accounts
Companies with net assets of at least $5,000,000
Persons or companies recognized by the OSC as an accredited investor