Ninepoint Fixed Income Outlook

In this monthly fixed income commentary preview, Vice President, Portfolio Manager Etienne Bordeleau discusses the market fallout from the war in Iran, the sharp rise in oil prices, and how the Ninepoint Fixed Income Team is positioning portfolios amid renewed volatility in bonds and credit markets.

Key Topics Covered:

• Iran Conflict and Energy Shock – The closure of the Strait of Hormuz and surge in oil prices triggered a broad selloff in risk assets, pushing bond yields higher and raising inflation fears.
• Why This Is Not 2022 – Etienne explains why today’s starting point is different, particularly in Canada, where inflation has been closer to target and the economy was already showing signs of weakness.
• Bank of Canada and Federal Reserve Outlook – The market began pricing in multiple rate hikes in response to the energy shock, but Ninepoint believes that reaction was overdone.
• Adding Duration on Dislocation – The team added duration across mandates during the month, taking advantage of what they viewed as an excessive repricing in bond markets.
• Credit Markets Still on Shaky Ground – Existing cracks in credit remain in place, and the team continues to see limited upside in an asset class that still looks historically expensive.
• Defensive Credit Positioning – Ninepoint is not adding high yield, extending credit duration, or increasing leverage, instead maintaining tight net credit exposure and selective hedges.
• Focus on Capital Preservation – Credit hedges helped offset volatility in March, supporting positive year-to-date performance and reinforcing the team’s focus on protecting capital and minimizing downside risk.