Transcript: CIBC Flexible Yield ETF (CFLX) (CAD-Hedged)

[CFLX CIBC Flexible Yield ETF (CAD-Hedged)] 

[Soft music plays throughout video]

[Flexible yield revealed][CIBC logo. Jeffrey E. Gundlach, CEO and CIO, DoubleLine®]

Flexible yield was designed to offer investors a place where they could hopefully have some success even if interest rates rise. So, it's a relatively short maturity type of portfolio. 

[Portfolio consists of relatively short maturities invested primarily in credit]

It is invested primarily in the credit market, not so much in government bonds because government bond yields are so low. 

[Seeks absolute returns even if interest rates go up]

But we're looking for absolute returns even if interest rates go up. So, some of the portfolio, a significant piece of it actually, is floating rate. So, if interest rates go up, you just get higher cash flows, which will support higher returns. 

[Shorter maturity bonds comprise a large part of the portfolio]

And the rest of the portfolio is in relatively short maturity bonds, which will have some price volatility. And if there's bad market conditions, we'll have temporary losses, but they mature in 2 or 3 years. So, you get your money back, and you would then, then be able to reinvest it, than existing higher interest rates. So, the goal is to offer something that is absolute returns.

[Flexibility across fixed income sectors]

We have very broad flexibility across fixed income sectors, we can invest in just about any part of the global bond market. 

[Portfolio can invest in any part of the global bond market]

But most of it’s in credit, so we, we subdivide the market into corporate credit, then below investment-grade corporate credit, emerging market debt, mortgage backed securities, both guaranteed by the U.S. government and non-guaranteed. Also, residential and commercial mortgage-backed securities. And then bank loans, which are floating rate in nature again, as are many of the commercial mortgage-backed securities, which are good for the rising interest rate environment. 

[Flexibility to move across fixed income sectors:

  • U.S. government securities
  • Investment-grade credit
  • Emerging markets debt
  • Residential mortgage-backed securities
  • Commercial mortgage-backed securities
  • Bank loans
  • Global high-yield debt
  • Asset-backed securities
  • Collateralized loan obligations
  • Developed market sovereign debt
  • Foreign exchange]

[Opportunities from a broad range of fixed income investments. Chart showing tactical exposure range1. 

Governments, 0% to 100%

Investment-grade credit, 0% to 50%

Mortgages, 0% to 100%

Asset-backed securities and commercial MBS, 0% to 40%

Global high-yield debt, 0% to 50%

Collateralized loan obligations (CLOs), 0% to 30%

Bank loans (floating rate), 0% to 50%

DM sovereign debt and FX, 0% to 50%

Emerging market debt, 0% to 50%

1The fund’s weight may be altered without notice based on economic, market or other conditions]

So, ah, we can go up and down with great deal of flexibility in these types of, ah, instruments. We think that investors in this flexible yield strategy are looking for something that’s absolute return.

[Extremely focused on risk management]

I think that… the lack of short-term trading… is somewhat unique to DoubleLine. A lot of firms use a lot of short-term trading. We don't really do that. We run relatively low turnover types of portfolios. 

Our, our goal is to buy low, structure the portfolio right and earn out the cash flows, hopefully to premium to the market under an overall risk umbrella that is probably below average, in terms of, ah, our competitors, in terms of risk tolerance. 

And so, I think, I think we've grown a lot and our investors have been satisfied with results because they know that we're extremely focused on risk management.

[Reasons to consider CFLX:

  1. Tactical allocation: Designed to capture opportunistic gains from market fluctuations
  2. Active duration management: Can help contain risk in all interest rate environments
  3. Diversified sources of yield: Access to a broader range of fixed income securities
  4. Managed by DoubleLine®: California-based, employee-owned firm with $147 billion in Assets Under Management (AUM) as of September 30, 2019]

[CIBC.com/etfs. CFLX invests primarily in the Renaissance Flexible Yield Fund. For more information on this fund, visit Renaissanceinvestments.ca]

[The views expressed in this video are the personal views of Jeffrey E. Gundlach and should not be taken as the views of CIBC Asset Management Inc. This video is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this document should consult with his or her advisor. All opinions and estimates expressed in this document are as of the date of publication unless otherwise indicated, and are subject to change. 

CIBC ETFs are managed by CIBC Asset Management Inc., a subsidiary of Canadian Imperial Bank of Commerce. Commissions, management fees and expenses all may be associated with investments in exchange traded funds (ETFs). Please read the CIBC ETFs prospectus or ETF Facts document before investing. To obtain a copy, call 1-888-888-3863, ask your advisor or visit CIBC.com/etfs. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. The material and/or its contents may not be reproduced without the express written consent of CIBC Asset Management Inc. ®CIBC Asset Management and the CIBC logo are registered trademarks of CIBC, used under license.

DoubleLine® is a registered trademark of DoubleLine Capital LP.]