`Cream Puffs' Offer Tasty Yield for This Top Canada Bond Fund
- Penderfund’s Castle looks for high-yielders with cash, assets
- His fund returned 23% in 2016 and beats 75% of peers this year
The CN Tower, center, stands near residential and commercial buildings in the financial district of Toronto, Ontario.
Photographer: Brent Lewin/BloombergGeoff Castle’s formula for beating his peers in the bond market starts with “cream puffs”: his term for unrated corporate bonds whose yields are often too sweet for other investors.
Bets on companies like Just Energy Group Inc. and W&T Offshore Inc. led to a return of 23 percent last year for the corporate bond fund Castle manages at Vancouver-based Penderfund Capital Management Ltd. That beat 98 percent of its peers, according to data compiled by Bloomberg. This year, the fund has gained 5.4 percent, outperforming three-quarters of its peers. Penderfund manages about C$645 million ($530 million) in total, with about C$160 million in credit.