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AGF Floating Rate Income Fund

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Experience is critical in the floating-rate market

AGF Floating Rate Income Fund is managed by Eaton Vance Investment Managers - the largest floating-rate manager by assets in North America.

1 | Interest rates are low now, but they won't be low forever.

The last 20 years have undoubtedly been a bond bull market. Falling interest rates have helped investors return more in fixed income investments than in equities. However, times are changing. Interest rates won't be low forever and it's time to position your clients' portfolios to take advantage of rising rates.

Loans vs. Bonds

Source: Eaton Vance, September 30, 2014.

2 | Loans are senior and secured

Loans are senior and secured. Typically, floating-rate loans hold the most senior position in a borrower's capital structure. This is important to loan investors because loans normally provide for the highest priority of claims on a borrower's cash flows and assets in the case of a default. Loans most often achieve this seniority by being "secured" by specific assets and/or stock pledged as collateral.



3 | Correlation. What correlation?

Because floating-rate loans have many unique investment characteristics, they often perform differently from the traditional asset classes most common to investment portfolios. The illustration shows how floating-rate loans have historically exhibited low correlation with stocks and many fixed-income asset classes, such as government, municipal and investment-grade corporate bonds.

5 year correlation

Source: Morningstar Direct, Credit Suisse Leveraged Loan Index, September 30, 2014.

4 | The advantage of Eaton Vance - a pioneer in floating-rate loan investment management



  • Measurable track record since 1989
  • Significant floating-rate loan investment resources and specialization
  • Extensive contiguous experience of investment team
  • Continuity of philosophy and process over time
  • History of performance over multiple market cycles

 

For more on the importance of getting in front of rising rates, visit www.agf.com/rethinkrisk.

A tool outlining the benefits of floating-rate loans and AGF Floating Rate Income Fund.
A basic informational guide on floating-rate loans in Q and A format.
An excerpt from a recent advisor white paper from Eaton Vance Management.
The Case for Reallocating to Floating-Rate Loans from High-Yield Bonds
Fixed-income investors have enjoyed an unprecedented bull market in bonds over the last 30 years, with falling interest rates adding significant price appreciation on top of bonds’ coupon income. However, times are changing and interest rates won’t be low forever. Now is the time to retool your portfolio for the eventuality of rising rates.

The information contained in this fund profile is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The payment of distributions should not be confused with a fund's performance, rate of return or yield. If distributions paid by the fund are greater than the performance of the fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a fund, and income and dividends earned by a fund, are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base falls below zero, you will have to pay capital gains tax on the amount below zero. The performance of a Fund may have been different had events such as mergers, portfolio manager changes and investment objective changes not taken place.

REASONS TO INVEST IN THIS FUND

The Fund provides monthly income (that floats with changing interest rates) and capital growth by investing in U.S. senior secured bank loans. This asset class provides protection against interest-rate risk and offers low correlation to typical fixed-income and equity securities.

INVESTMENT PROCESS

Eaton Vance, the largest floating-rate loan manager by assets in North America, uses a bottom-up, research-driven investment approach, utilizing the expertise of 29 investment professionals to build a portfolio of senior floating-rate loans, diversified by sector, issuer and credit tier.

Portfolio Managers / Advisors
Co-Director, Floating-Rate Loan Investment Group
Eaton Vance Management
Co-Director, Floating-Rate Loan Investment Group
Eaton Vance Management
Vice-President, Portfolio Manager
Eaton Vance Management
Expand All
Date as of 08-31-2016

Performance

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Portfolio Details

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Fund Overview

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Risk Management

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Related & Regulatory Documents

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¿Eaton Vance Management (Boston, Massachusetts), Portfolio Manager of AGF Floating Rate Income Fund, is an International Advisor relying on an exemption from Canadian registration requirements under National Instrument 31-103.

Please refer to AGF.com for distribution information.

˜MER as of March 31, 2016. 1The distribution is not guaranteed, may be adjusted from time to time at the discretion of the fund manager and may vary from payment to payment. Amount shown, if any, is the most recent distribution amount. ¤Cash is not included. Note: numbers may not add up to 100% because of rounding. *TTM = Trailing 12-month.

The information contained in this fund profile is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The payment of distributions should not be confused with a fund's performance, rate of return or yield. If distributions paid by the fund are greater than the performance of the fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a fund, and income and dividends earned by a fund, are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base falls below zero, you will have to pay capital gains tax on the amount below zero. The performance of a Fund may have been different had events such as mergers, portfolio manager changes and investment objective changes not taken place.

Investment Objective & Strategy

Eaton Vance, the largest floating-rate loan manager by assets in North America, uses a bottom-up, research driven investment approach, utilizing the expertise of 29 investment professionals to build a portfolio of senior floating-rate loans, diversified by sector, issuer and credit tier.

The Fund provides monthly income (that floats with changing interest rates) and capital growth by investing in U.S. senior, secured bank loans. This asset class provides protection against interest rate risk and offers superior correlation to typical fixed-income and equity securities.

Investment philosophy

The Portfolio Managers seek to outperform through research and risk-weighted portfolio optimization.

  • Characteristics of floating-rate loans limit upside price return.
  • Outperformance generated through a focus on limiting downside and sound credit selection.
  • Income orientation, diversification and systematic approach to maximize risk-adjusted performance.
  • Fundamental analysis and risk-weighted portfolio construction to optimize an attractive portfolio of loans.
  • Significant experience and specialization in floating-rate loans is critical to adding value.


Investment process

Investment team identifies most appropriate opportunity set

S&P/LSTA Leveraged Loan Index & select non-U.S. loans

Apply criteria (examples):

  • Minimum deal size
  • Maximum leverage
  • Qualitative assessments

Select universe analyzed through fundamental credit research process

  • Time-tested bottom-up credit research
  • Relative risk rankings assigned by analysts

Systematic risk-weighted construction driven by relative risk rankings

  • Focus on diversification
  • Position sizing optimized for optimal risk/return profile



Eaton Vance investment team leadership

Scott Page, CFA

  • Director of Floating-Rate Loans, Portfolio Manager
  • 31 years of investment experience
  • 23-year tenure at Eaton Vance
  • BA from Williams College; MBA from Amos Tuck School of Dartmouth College

Craig Russ

  • Director of Credit Analysis, Portfolio Manager
  • 26 years of investment experience
  • 15-year tenure at Eaton Vance
  • BA from Middlebury College

The information contained in this fund profile is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The payment of distributions should not be confused with a fund's performance, rate of return or yield. If distributions paid by the fund are greater than the performance of the fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a fund, and income and dividends earned by a fund, are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base falls below zero, you will have to pay capital gains tax on the amount below zero. The performance of a Fund may have been different had events such as mergers, portfolio manager changes and investment objective changes not taken place.

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