Lorica Focused Fixed Income

“Our necks are sore from trying to follow the gyrations of the bond market these last few months – any rest they may have gotten during the holiday break was short lived. We were not convinced at year end that investors were getting it quite right – we felt yields were pushed too low and expectations of easing from both the Fed and the Bank of Canada were far too significant and premature. Anticipation of imminent knockout blows to the economy and the submission of inflation were and are unwarranted, with both appearing somewhat resistant to tighter monetary policy.”

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January 2024 Commentary

Lorica Focused Corporate Bond

“Investment grade credit spreads rallied to their best levels in two years as the soft-landing narrative and inflows to investment grade funds overshadowed record issuance and resurfacing US regional bank concerns. For the month, domestic investment grade credit spreads narrowed by an average of 6 basis points, with lower-rated, higher-beta debt generally outperforming across the credit curve. The positive momentum however, failed to migrate further down the credit quality scale as high yield spreads came under pressure from heavy supply, tight technical levels and eroding credit quality concerns.”

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January 2024 Commentary

Lorica Short Term Bond

“Our necks are sore from trying to follow the gyrations of the bond market these last few months – any rest they may have gotten during the holiday break was short lived. We were not convinced at year end that investors were getting it quite right – we felt yields were pushed too low and expectations of easing from both the Fed and the Bank of Canada were far too significant and premature. Anticipation of imminent knockout blows to the economy and the submission of inflation were and are unwarranted, with both appearing somewhat resistant to tighter monetary policy.”

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January 2024 Commentary