Fixed-income investments, bonds being a common example, are an important source of diversification for portfolios that generate income and help preserve capital. Fixed-income investments also help offset the sensitivity of HOOPP liabilities to interest
rates and inflation.
Interest rates are important because they represent the cost of money over time – what lenders want borrowers to pay for money. Interest rates also influence investment decisions by setting a benchmark on how much return is needed above the current
interest rate to make it worth taking on more risk. For pension plans, interest rates directly affect the funded status as they are an important factor in how the ratio is calculated. Generally speaking, rising interest rates improve funded ratios
while declining rates lower the ratio.
HOOPP has a large fixed-income portfolio that includes mid-term and long-term bonds, and inflation-linked bonds. The bonds in this portfolio provide government-guaranteed rates of return, serve as high-quality liquid collateral to support other investment
activity, and are a diversifying asset for the Fund. As well, the Fund's bond portfolio can also generate returns through active management that seeks to add value.
Fixed-income investments, bonds being a common example, are an important source of diversification for portfolios that generate income and help preserve capital. Fixed-income investments also help offset the sensitivity of HOOPP liabilities to interest
rates and inflation.
Interest rates are important because they represent the cost of money over time – what lenders want borrowers to pay for money. Interest rates also influence investment decisions by setting a benchmark on how much return is needed above the current
interest rate to make it worth taking on more risk. For pension plans, interest rates directly affect the funded status as they are an important factor in how the ratio is calculated. Generally speaking, rising interest rates improve funded ratios
while declining rates lower the ratio.
HOOPP has a large fixed-income portfolio that includes mid-term and long-term bonds, and inflation-linked bonds. The bonds in this portfolio provide government-guaranteed rates of return, serve as high-quality liquid collateral to support other investment
activity, and are a diversifying asset for the Fund. As well, the Fund's bond portfolio can also generate returns through active management that seeks to add value.
What drives our portfolio strategy?
Data and analysis
We make asset mix decisions and determine value-add strategies based on careful analysis of information, including the macroeconomic outlook, technical analysis and quantitative research as examples.
Learn more about HOOPP’s fixed-income portfolio and our investment performance in our latest Annual Report.
This document provides a simplified overview of HOOPP's benefits based on the terms of the HOOPP Plan Text at the time of publication. From time to time, HOOPP may amend the HOOPP Plan Text. In cases where the information provided in this document differs from that contained in the HOOPP Plan Text, the HOOPP Plan Text will govern. More details, including the full HOOPP Plan Text and a complete description of the Plan and its benefits, can be found on hoopp.com.
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