Fixed Income Summary

ATRF’s Canadian bonds are held in two distinct portfolios. The larger of the two is managed internally by ATRF’s own investment professionals. This portfolio performed extremely well in a very volatile and challenging year for fixed-income managers. The smaller of the two portfolios is externally managed and has a mandate to invest in a greater variety of fixed-income products, which includes a higher degree of exposure to credit. This credit exposure led to poor performance in the first half of the year and excellent performance in the second half of the year. When taken together, ATRF’s Canadian bond portfolios returned 8.3%, well in excess of the benchmark DEX Universe Bond Index, which returned 7.2% for the year.

With short-term interest rates at or near all-time lows for most of the year, it was very difficult to earn a meaningful return from money-market instruments. For the year, ATRF’s money-market portfolio returned 1.5%, which exceeded the 1.0% return of the DEX 30 Day T-Bill Index. On the whole, ATRF’s fixed-income portfolios returned 7.2% for the year, which compared favourably to the benchmark return of 6.4%.