Nexus North American Income Fund Performs

Morningstar Canada publishes a performance survey of various mutual funds based on their respective investment mandates. The Nexus North American Income Fund, which is a pooled fund offered only to Nexus clients (with whom we have a “managed account” relationship), is not included in the survey. Nevertheless, it is interesting to compare it to its closest Morningstar peer group – the “Canadian Core Fixed Income” category.

The Nexus Fund returns compare very favourably to the mutual fund returns in the survey for each of the 1-, 2-, 3-, 5- and 10-year periods ending December 31, 2013. Two things bear highlighting, however. First, not all of the mutual funds in the peer group have an allocation to “income-oriented equities” as the Nexus fund does. Second, the Nexus fund returns are presented before the deduction of investment management fees, while the peer group returns are presented after deducting such fees. (This is because Nexus’s fees are different for each client, being based on the value of the client’s family portfolio.) Even after accounting for these factors, the Nexus North American Income Fund performance stands out in comparison.

As Devin Crago points out in his post, “It’s tough to win the game from the sidelines”, but there are plenty of reasons why a quality fixed income component is an important part of a disciplined financial plan. Compared to the returns currently available from cash, GICs and many other fixed income alternatives, the Nexus North American Income Fund could provide an attractive alternative.

The Fund invests in a combination of money market securities, investment grade bonds and up to 20% of its assets in Canadian and U.S. income-generating equities. Distributions of interest and dividends from the fund are made monthly and, in most cases, re-invested in additional units of the fund.

If you would like to discuss how we might help you make the most of your sidelined assets, please don’t hesitate to contact us.