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Sentry Alternative Asset Income Fund

In today’s low-interest-rate environment, the search for yield is difficult. Traditional asset classes such as dividend-paying equities, and government and investment-grade corporate bonds don’t always provide sufficient income. However, alternative assets, such as high-yield bonds, REITs, infrastructure and options typically provide a higher yield as well as the potential to improve diversification and lower volatility in a portfolio. Sentry Alternative Asset Income Fund combines all four investments in a single solution.

Enhanced income

Alternative assets, such as high-yield bonds, REITs and infrastructure, typically deliver higher yield than traditional income-producing assets. The fund invests in these asset classes and employs conservative options strategies to provide investors with increased income potential.

AAIF chart yield

Source: Bloomberg L.P., data as at December 31, 2016

Reduced volatility

Including asset classes with lower or negative correlation can help diversify a portfolio and reduce volatility. The asset classes in the fund tend to perform differently than traditional equities and fixed income, providing a cushion against equity price fluctuations.

10-year correlation of asset classes*

 Canadian bondsCanadian equitiesU.S. equitiesGlobal equitiesU.S. bonds
High-yield bonds0.350.210.550.590.35
Global REITs0.320.410.700.73-0.01
Global Infrastructure0.350.530.710.830.00

Correlation is a measure of how asset classes move in relation to one another. The correlation will range between 1 and -1 with 1 representing asset classes moving in the same direction at the same time and -1 representing asset classes moving in opposite directions.

Source: Morningstar Direct. Data as at December 31, 2016.

* Canadian equities (S&P/TSX Composite Index), U.S. equities (S&P 500 Index), Global equities (MSCI World Index), Canadian bonds (FTSE TMX Canada Universe Bond Index), Global high-yield bonds (BofAML Global High Yield Index), Global REITs (S&P Global REIT Index), Global infrastructure (S&P Global Infrastructure Index), Options (50% CBOE S&P 500 BuyWrite Index 50% CBOE S&P 500 PutWrite Index), Corporate bonds (FTSE TMX All Corporate Bond Index)

Increased return diversification

Asset classes perform differently each year. Including a combination of real estate, infrastructure, high-yield bonds and options in a single fund offers a simple way to diversify the return potential of a portfolio.

Source: Morningstar. Priced in Canadian dollars as at December 31, 2016. Assumes reinvestment of all income and no transaction costs or taxes.

Sentry: a strong history in alternative assets

Sentry has considerable expertise in alternative asset investing, including over 95 years of combined investment experience.

AAIF history diagram

To learn more about Sentry Alternative Asset Income Fund visit the fund details page.