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Canadian Money Market

Profile

  • Managed in-house by Mawer since the firm's inception in 1974
  • Provides current income through investment in government treasury bills or bonds, bank or trust company certificates of deposit and corporate obligations
  • Approach is based primarily on interest rate anticipation
  • Canadian dollar denominations only

Process

We believe that Bank of Canada policy is the key factor in determining the direction of short term rates in Canada. Analysis and accurate interpretation of the Bank's activities provides the framework for judgement of the ways in which economic data, longer term rate movements and currency trends will impact money markets. In addition, our approach also relies on:

  1. yield curve analysis including indifference scenarios, implied forward rates and liquidity premiums
  2. credit and spread analysis
  3. supply/demand anomalies

Our objective is to preserve capital and earn high current interest income by investing in government and corporate debt instruments maturing in two years or less. Additional constraints are:

  1. assets are restricted to Canadian dollar denominations only
  2. the average term to maturity will not exceed one year
  3. maximum limit of 10% per corporate issue
  4. the minimum rating on any security is R1 at the time of purchase

Portfolio Manager

Michael Crofts, CFA, Director, Portfolio Manager

Need More Information?

If you wish to receive detailed information about our Canadian Money Market management, please e-mail us at Mawer Information .