September 5th, 2011
Global central banks continue to pursue a policy of maintaining liquidity by keeping benchmark interest rates low. At under 2.0%, core inflation remains muted in Canada and accordingly, the Bank of Canada has announced that it intends to keep its benchmark at current levels indefinitely to support the economic recovery.
Given current and expected conditions, and the increase in credit risk (which has the broad effect of increasing yields on corporate bonds), Coleford’s bond strategy is unchanged. We are maintaining our broadly diversified portfolio, extending maturities out to 10 years, while keeping the average term short.