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Russell Core Plus Fixed Income Pool
Class A Units
Goal
To provide diversification against equities by utilizing a broad range of available fixed income strategies and investing in fixed income securities of both Canadian and non-Canadian issuers.
Target Allocation
(Actual manager allocation may vary)
| Style |
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Weight |
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Manager |
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| Security Selection and Global |
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33% |
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Goldman Sachs Asset Management |
| Sector Selection and Global |
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33% |
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Sanford C. Bernstein |
| Interest Rate Management and Global |
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33% |
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Pacific Investment Management Co. |
Summary of Investment Portfolio
| Top 25 Holdings |
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% of Pool |
| as at June 30, 2008 |
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| Percentage of net assets ($274,679,705) of the Pool |
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| Long Positions* |
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| Government of Canada 4.250% 01-Dec-2009 |
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7.2 |
| Government of Canada 4.250% 01-Jun-2018 |
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6.6 |
| Government of Canada 4.000% 01-Jun-2016 |
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4.4 |
| Canada Housing Trust No.1 4.550% 15-Dec-2012 |
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4.0 |
| Canada Housing Trust No.1 3.950% 15-Jun-2013 |
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3.9 |
| Government of Canada 5.750% 01-Jun-2033 |
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3.6 |
| Government of Canada 3.750% 01-Jun-2012 |
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3.5 |
| Canada Housing Trust No.1 3.600% 15-Jun-2013 |
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3.3 |
| Government of Canada 8.000% 01-Jun-2023 |
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2.8 |
| Government of Canada 4.000% 01-Jun-2017 |
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2.7 |
| Federal Fund 30 Day Future |
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2.4 |
| Fannie Mae 6.000% 01-Jul-2038 |
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2.2 |
| Government of Canada 5.000 01-Jun-2037 |
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2.1 |
| Province of Quebec 4.500% 01-Dec-2017 |
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2.0 |
| US Treasury Note 2.750% 31-Jul-2010 |
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2.0 |
| Province of Quebec 5.000% 01-Dec-2038 |
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1.9 |
| US Treasury Note 4.000% 15-Aug-2018 |
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1.9 |
| Government National Mortgage Association 5.500% 01-Jul-2038 |
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1.9 |
| Province of Ontario 4.700% 02-Jun-2037 |
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1.7 |
| Euro-Bund Future |
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1.6 |
| Fannie Mae 5.500% 01-Sep-2036 |
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1.5 |
| Canada Housing Trust No.1 3.950% 15-Dec-2011 |
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1.5 |
| CBA |
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1.5 |
| BNP Paribas 31-Jul-2008 |
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1.5 |
| Province of Ontario 4.300% 08-Mar-2017 |
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1.4 |
| * Long positions represent 93.2% of the Pool's Net Assets. |
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| Short Positions** |
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| US Treasury Note 3.000% 31-Jul-2013 |
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-3.1 |
| US Treasury Note 4.000% 15-Aug-2018 |
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-2.7 |
| US Treasury Note 4.375% 15-Feb-2038 |
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-0.7 |
| Euro-BOBL Future |
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-0.4 |
| ** Short positions represent 6.8% of the Pool's Net Assets. |
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Note: The statement of investment portfolio may change due to ongoing portfolio transactions of the Pool. This list will be updated within 60 days of each quarter end.
| Sector Weights |
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| as at June 30, 2008 |
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| Federal |
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44.6 |
| Foreign |
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30.3 |
| Provincial |
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13.6 |
| Corporate |
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10.8 |
| Municipal |
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0.7 |
Introducing Core Plus
Innovation: The Canadian fixed income landscape is currently undergoing an evolution, and the Core Plus Fixed Income Pool ensures that clients remain on the leading edge of fixed income strategies and products.
Increased Return Potential: Core Plus is an alternative to our Russell Canadian Fixed Income Pool. The strategy provides a wider opportunity set by expanding client investment guidelines to include certain "non-core" fixed income sectors, such as non-Canadian high yield, currency and emerging markets debt securities.
Enhanced Diversification: This additional flexibility offers the benefits of added diversification by utilizing sectors with lower correlations to traditional fixed income, as well as the potential for higher levels of excess returns relative to core fixed income.
Greater Access to Foreign Markets: The Core Plus approach has been a well-established fixed income strategy in the U.S. over the past 15 years and has more recently gained popularity amongst institutional investors in Canada. Core Plus is an ideal strategy at a time when foreign investing restrictions have been eliminated and there are greater opportunities for excess return in the global fixed income market.
Key Benefits
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- Provides an effective complement to a balanced portfolio, by seeking increased performance of the fixed income segment of the portfolio while not significantly increasing the total risk.
- Increased diversification, due to a wider opportunity set, lower associated correlations, and less reliance on duration.
- Fixed income securities of non-Canadian issuers
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The Pool is Suitable for Investors Who
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- Have a moderate tolerance for risk and a medium time horizon.
- Seek a higher level of fixed income return potential, contributing to the fixed income component of a diversified portfolio.
- Want to receive interest income in their portfolio.
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Each Pool in the Russell Sovereign Investment Program (other than Sovereign Diversified Monthly Income Portfolio) offers Class A, B, E, F and O units. The Sovereign Diversified Monthly Income Portfolio has E-5 and E-7 units. The returns of each class of units may differ as a result of varying fees and expenses. Class A and B units have the same management fee. Your adviser is paid a trailer fee as compensation for providing services to you. Class F units are sold only to investors enrolled in a fee-for-service or wrap program and these units have a reduced management fee and do not pay trailer fees to the adviser. Instead each investor negotiates a separate, ongoing fee that is paid directly to their adviser and is based on the market value of the investors' assets. Class O units are only available from Russell Investments Canada Limited and are generally not sold to the public. They are intended to be used in fund of fund arrangements and other wrap programs sponsored by us. They are also available to large institutional investors or other accounts as we may determine from time to time on a case-by-case basis. No management fees are charged to the Pools with respect to the Class O units. Instead, each Class O investor negotiates a separate fee that is paid directly by the investor. Class E units targets large investors and as such, have a higher minimum investment and a lower trailer and management fee. For more information about our Pools please see Legal Information.
Date of first publish: October, 2007.
Inception: October 2007
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Products and services described on these websites are intended for Canadian residents only. Information on these sites should not be considered a solicitation to buy or an offer to sell a security to any person. Persons outside Canada may find more information about products and services available within their jurisdictions by going to Russell's worldwide site, http://www.russell.com.
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© Russell Investments Canada Limited 2008. All Rights Reserved.
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