Ninepoint Alternative Credit Opportunities Fund
More opportunities for income:
Strategy includes use of hybrid securities (e.g. preferred shares, convertible bonds, structured notes) and ability to apply leverage to investment-grade bonds.
More flexibility to generate returns:
Latitude in security selection enables inclusion of bespoke securities, as well as trading strategies such as interest carry, active trading, yield curve, sector positioning, and short selling.
Active risk management:
Use of hedging tools to protect investors from interest rate risk and credit risk.
Easy access:
Easy access for all Canadian investors as a liquid alternative investment.
The Liquid Alt Advantage
Sector Allocation as of 03/28/2024
| Sector | Weight |
|---|---|
| Investment Grade | 148.22 |
| Asset Back Securities | 25.25 |
| Cash And Equivalents | 8.61 |
| High Yield | 8.32 |
| Loans | 2.71 |
| Derivatives | -0.76 |
| Equities | -11.63 |
| Government Related | -80.72 |
Geographic Allocation as of 03/28/2024
| Sector | Weight |
|---|---|
| Canada | 75.62 |
| United Kingdom | 7.61 |
| United States | 7.15 |
| Australia | 5.21 |
| France | 1.92 |
| Japan | 1.16 |
Top Ten Holdings as of 03/28/2024
| Issuer Name |
|---|
| Bank Of Montreal 1.928% 07/22/2031 |
| Barclays Plc 2.166% 06/23/2027 |
| Canada (Government Of) 3.25% 12/01/2033 |
| Canadian Imperial Bank Of Commerce 1.96% 04/21/2031 |
| Canadian Western Bank 3.668% 06/11/2029 |
| Cds_22-201-C 3.609 15-Jan-2025 |
| Empire Life Insurance Co 2.024% 09/24/2031 |
| Enbridge Inc 04/01/2024 |
| Toronto-Dominion Bank/The 3.06% 01/26/2032 |
| Transcanada Pipelines Ltd 5.33% 05/12/2032 |
Available to every Canadian investor who seeks additional portfolio income and diversification, Ninepoint introduces a new liquid alternative fixed income fund: the Ninepoint Alternative Credit Opportunities Fund.
Portfolio Construction Process
A differentiated fixed income alternative that fully utilizes the strategies and assets available within the parameters of the liquid alternative class. The Fund functions very much like a credit multi-strategy, investing in different types of credit, employing various investment strategies.
Core portfolio: an allocation to less liquid securities, public credit, shorter-to-intermediate dated corporate bonds, high yield, structured notes, asset-backed securities, un-rated private placements, global credit, equity like securities and preferred shares. By blending a variety of credit greater yield can be generated.
Overlay portfolio: different strategies employed include interest carry, active trading, and short selling. Some leverage employed, but only on high quality investment grade credit. The overlay generates income with very little interest rate sensitivity as government bonds are short sold against all the corporate bond positions, isolating the credit spread.
Short Selling to Neutralize Interest Rate Risk
Government bonds are short sold against all the Corporate bond positions, isolating the credit spread.
Ninepoint Alternative Credit Opportunities Fund
Frequently Asked Questions
Q: Why offer a liquid alternative mutual fund?
A: It is all about flexibility. Having more tools in the toolbox to deliver more income for investors in a low interest rate environment. The liquid alt format allows us:
- Hedging tools, to protect investors from interest rate and credit risk. We expect that the interest rate sensitivity of this fund will remain very low.
- More opportunities for income, such as applying leverage on investment grade bonds and investing in a diverse array of hybrid securities.
- More active use of securities - we intend on deploying less liquid, bespoke securities.
- Trading strategies that include interest carry, active trading, yield curve, sector positioning and short selling
Q: What are the key differences between this fund and the Ninepoint Diversified Bond Fund?
A: The Portfolio Management team will be applying the same investment rigour and style as the Ninepoint Diversified Bond Fund. The new Alternative Credit Opportunities Fund will more closely resemble the Ninepoint Credit Income Opportunities Fund, which is essentially an alternatively managed credit strategy. In fact, as can be seen from the table below, the characteristics and risk profiles of the two funds will be quite similar. Except for leverage, which is limited to 3x, and the use of illiquid securities, limited to 10% of NAV, we expect that the Alternative Income Opportunities and Credit Income Opportunities Fund may exhibit very comparable performance over time.
Q: What is the managers’ experience with this type of strategy?
A: The portfolio management team does not manage index-like bond products. Throughout their careers, they have always managed very active strategies. Mark Wisniewski has been managing credit strategies since 2009. At Ninepoint he manages the Ninepoint Diversified Bond Fund (2017) and the Ninepoint Credit Income Opportunities Fund (2013). Given the management’s team track record and the similarities between the Ninepoint Credit Income Opportunities Fund and the new Alternative Credit Opportunities Fund, the team has demonstrated that they have the experience and process necessary to manage such a strategy.
Fund Webinar
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Wisniewski's Puzzle
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Alternative Credit Opportunities Fund Brochure
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Investment Team
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Regulatory Documents
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Ticker & Fund Codes
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Fund Details
Fund Type Alternative Fixed Income Strategy Inception Date April 30, 2021 Registered Tax Plan Status Eligible Management Fee Series A: 1.40%
Series ETF: 0.90%
Series F: 0.90%
Series QF: 0.80%Performance Fee See prospectus Minimum Initial Investment $500 Minimum Subsequent Investment $25 Minimum Investment Term 20 days (1.5% penalty) Redemptions Daily Valuations Daily CUSIP NACO: 65443Q100 (Cboe)
††Inception: May 10, 2021. All returns and fund details are a) based on Class F shares; b) net of fees; c) annualized if period is greater than one year; d) as at March 31, 2024. Top ten holdings, sector allocation and geographic allocation as at March 31, 2024. Top ten holdings based on % of net asset value. Sector allocation based on % of net asset value. Geographic allocation based on % of net asset value and excludes cash. Numbers may not add up due to rounding. Cash and cash equivalents include non-portfolio assets and/or liabilities.
The Ninepoint Alternative Credit Opportunities Fund (the “Fund”) is generally exposed to the following risks: Borrowing Risk; Collateral Risk; Concentration Risk; Credit Risk; Currency Risk; Cybersecurity Risk; Derivatives Risk; Foreign Investment Risk; Inflation Risk; Interest Rate Risk; Leverage Risk; Liquidity Risk; Market Risk; Performance Fee Risk; Securities Lending, Repurchase and Reverse Repurchase Transactions Risk; Series Risk; Short Selling Risk; Small Company Risk; Specific Issuer Risk; Substantial Securityholder Risk and Tax Risk. Additional risks associated with an investment in ETF Series securities of this Fund include: Absence of an active market for ETF Series risk; Halted trading of ETF Series risk and Trading price of ETF Series risk.
Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rate of return for F shares of the Fund for the period ended March 31, 2024 is based on the historical annual compounded total return including changes in share value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.
Are You An Accredited Investor?
An investment in this Fund requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in this type of an investment. Investors in the Fund must be prepared to bear such risks for an extended period of time and should review suitability with their Investment Advisor.
The minimum subscription amount is $150,000.00 in all jurisdictions, unless you meet the definition of "accredited investor" under National Instrument 45-106 Prospectus and Registration Exemptions.
If you meet the definition "accredited investor" (see below), you may invest a minimum of $25,000. Please consult the Offering Memorandum to determine your qualification status. Investment Advisors should consult their company's internal policies.
The Subscriber, or one or more beneficial purchasers for whom the Subscriber is acting, is (i) a resident of, or the purchase and sale of securities to the Subscriber is otherwise subject to the securities legislation of one of the following: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, North West Territories, or Nunavut, and the Subscriber is (and will at the time of acceptance of the Subscription be) an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106") because the Subscriber is one of the following:
| (a) | a Canadian financial institution, or a Schedule III bank; |
| (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
| (c) | a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
| (d) | a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
| (e) | an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
| (f) | the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
| (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec; |
| (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
| (i) | a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada; |
| (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; |
| (k) | an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; (Note: If individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.) |
| (l) | an individual who, either alone or with a spouse, has net assets of at least $5,000,000; |
| (m) | a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; |
| (n) | an investment fund that distributes or has distributed its securities only to:
|
| (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
| (p) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
| (q) | a person acting on behalf of a fully managed account managed by that person, if that person:
|
| (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
| (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
| (t) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
| (u) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or; |
| (v) | a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor. |
Toronto, Ontario M5J 2J1 Canada