Page 9 - Transforming To Stay Successful

o some of us, the 80s and 90s feel like they were Meeting our clients’ targets using our existing strategies
just yesterday, but when you stop to think about it, and pooled fund products is not possible over the long-
T a lot’s changed since then — and no, we aren’t term. To increase the probability of meeting their basic
referring to the fact you no longer have shoulder pads return requirements, we need to adapt with capital
in your suit jacket, use floppy disks and dial-up internet, markets.
or are worried about the impending Y2K... The capital
So, how do we do that? We’re becoming a more
markets are drastically different, and they continue to
active, in-house asset manager who uses sophisticated
get more and more complex at a rapid rate.
strategies, is risk aware, and deploys more capital into the
There’s no use sugar coating it: we’re operating in a illiquid markets. We aren’t alone in our approach. This is a
challenging environment for institutional investors. Interest trend that we’re seeing with institutional investors across
rates are historically low, inflation is low, and it’s an age Canada and worldwide.
of monetary and fiscal stimulus. And while markets are
difficult to forecast, it looks like it’ll stay this way for the
foreseeable future.

To give you an idea of how different the capital markets
are, consider this: a portfolio of short-term bonds in the
‘90s could generate a return of about 10 per cent; in
the times they are a changin’
today’s markets the same portfolio may only provide
a return of around two per cent. Keep in mind that our
clients’ basic rate of return is between 6.0 and 6.6 per
cent over the longer term (10–15 years).

bcIMC

OH, HOW TIMES HAVE CHANGED… 9