Canadian Equities

In Canadian equities, Aurion believes that value can be added by constructing an index-relative portfolio with a modest growth bias, and by active trading around established equity positions.

• Aurion constructs a diversified portfolio of Canadian equity investments based on bottom-up security selection, mainly relying on industry relative factors. The portfolio is generally large cap, with market-like risk and valuation characteristics, and superior growth fundamentals.
  
• Uniquely, Aurion actively trades portfolio positions using pricing anomalies, supply/demand mismatches, short-term relative attractiveness and other information flows.

Overview of Canadian Equity Management (PDF File)

Fixed Income

In Fixed Income, we use four main value-added strategies for portfolio management: duration, curve positioning, sector allocation and security selection.

• For duration, curve and sector allocations, we establish ranges for yield spread relationships over the next 12-18 months. We incrementally adjust the portfolio in anticipation of mean reversion in these relationships.
  
• For security selection, we focus on specific pricing opportunities. In particular, we emphasize spreads for different maturities, fundamental credit analysis of corporate issues, peer spreads and supply/demand issues
  

Real Return Bonds

In Real Return Bonds, Aurion offers an active strategy that we believe is unique in Canada. It uses three value added levers:

1. Active duration management against the SC RRB Index;
2. Arbitrage trading with currency-hedged investments in US Treasury Inflation-indexed Securities (referred to as ‘US TIPS’); and
3. Break-even trading between real return bonds, and long nominal Canada bonds.
   

Corporate Bonds

In Corporate Bonds, Aurion offers a product that uses the four main value added strategies: duration, curve positioning, sector allocation and security selection.

• For curve and sector allocations and duration within the corporate portfolio, we emphasize a top-down economic outlook.
• For security selection, we focus on bottom-up credit analysis and specific pricing opportunities. In particular, we emphasize spreads for different maturities, fundamental credit analysis of corporate issues, peer spreads and supply/demand issues.
  

International Index Plus/Portable Alpha Strategies

For International Index-Plus/Portable Alpha strategies, we offer portfolios that combine Index-like risk characteristics with a value added options overlay. This strategy is comprised of the following key elements:

• An Index portfolio constructed using a combination of a money market portfolio, Index swaps and ETFs; and
• Options trading strategies that seek to add value from short term (1 – 3 months) directional moves in the equity markets.