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The yield to maturity on income funds has risen


As the Bank of Canada raises its key rate, the yield to maturity on Canadian money market securities and bonds increases.

The world’s major central banks, such as the U.S. Federal Reserve, the European Central Bank and the Bank of England, have also raised their rates over the past year. As a result, the yield to maturity on global bonds has also increased. What is yield to maturity?

The FÉRIQUE Short-Term Income Fund and the FÉRIQUE Canadian Bond Fund are exposed to the Canadian bond market. The FÉRIQUE Global Sustainable Development Bond Fund and the FÉRIQUE Globally Diversified Income Fund are exposed to the Canadian bond market and global markets.

Their yields to maturity are not the returns on the funds, they are not guaranteed, they may change from day to day and they are presented before expenses:

Average yield to maturity (before fees)
as of February 28, 2023

FÉRIQUE Short-Term Income Fund 5.0%
FÉRIQUE Canadian Bond Fund 4.7%
FÉRIQUE Global Sustainable Development Bond Fund 5.1%
FÉRIQUE Globally Diversified Income Fund 4.9%
Source : Addenda Capital inc., AlphaFixe Capital, Baker Gilmore & Associates inc., Columbia Threadneedle Management Limited., Gestion d'actifs CIBC inc. and Gestion FÉRIQUE

These data come directly from our portfolio managers and fluctuate each day on the basis of factors such as market forecasts and central bank decisions. We suggest you consult the FÉRIQUE Fund returns. Mutual funds are not guaranteed, their values change frequently and their past performance may not be repeated.

What is yield to maturity?

Yield to maturity is the expected total annualized return on a bond if the bond is held to maturity. For example, the Short Term Income Fund’s yield to maturity is the weighted average of all the securities in the Fund, before expenses and as at a specific date, if they are held to maturity. Yield to maturity fluctuates along with the market value of the bonds, interest rates, coupon rates and remaining interest payments. It’s an indication of the expected return but it isn’t guaranteed and it changes over time.

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