RBC BlueBay Strategic Income Fund Class I (RBSIX)

Overview

The fund mentioned is a versatile investment entity focusing on the acquisition of fixed income securities. These securities constitute a broad range of debt instruments, including but not limited to, bonds, both from municipal and corporate issuers, as well as mortgage-related and asset-backed securities, alongside obligations from U.S. and foreign governments and their respective agencies. The core investment strategy revolves around U.S. domestic investment grade bonds, yet it maintains a flexible approach, permitting investments across various sectors. This flexibility extends to incorporating non-U.S. and non-investment grade securities into its portfolio, allowing for a diverse and potentially risk-adjusted return profile.

Products and Services

• Bonds

  Bonds, as part of the fund's investment portfolio, include debt securities issued by both corporations and governments. These instruments provide a fixed or variable interest income over time, with the principal amount typically repaid at maturity. This provides investors with a predictable income stream, making it an essential component of the fund’s investment strategy.

• Municipal Securities

  Municipal securities, otherwise known as munis, are issued by state and local governments and their various agencies. These securities often offer tax-exempt interest income, making them an attractive option for tax-conscious investors. They are used to fund public projects, such as schools, highways, and infrastructure projects, thus contributing to community development while providing investment opportunities.

• Mortgage-Related and Asset-Backed Securities

  This category includes securities backed by mortgages or other assets. Mortgage-related securities are tied to residential or commercial mortgage loans, providing income derived from the interest and principal payments of these loans. Asset-backed securities, on the other hand, might be underpinned by a variety of asset types, offering investors exposure to different sectors of the economy.

• Obligations of U.S. and Foreign Governments and Their Agencies

  Government and agency securities represent loans issued or guaranteed by U.S. and foreign government entities. These are considered low-risk investments since they are backed by the issuing government's credit. In the U.S., these might include Treasury bonds, notes, and bills, which are direct obligations of the federal government, as well as securities issued by government agencies. Foreign government securities offer a way to diversify internationally, although they come with higher risks related to the economic and political stability of the issuing countries.

• U.S. Domestic Investment Grade Bonds

  Focused primarily on investment-grade bonds issued within the United States, these securities are deemed to have a lower risk of default and hence provide a more stable income. Investment grade bonds are rated at least BBB- by major credit rating agencies, indicating a strong capacity to meet financial commitments. This segment acts as the fund’s investment cornerstone, aiming for steady returns with moderated risk.

• Non-U.S. and Non-Investment Grade Securities

  The inclusion of non-U.S. and non-investment grade securities opens the door to higher yield opportunities, though with an increased level of risk. Non-investment grade bonds, also known as high-yield or junk bonds, offer higher interest rates to compensate for their higher risk of default. Similarly, non-U.S. securities provide geographical diversification, potentially enhancing portfolio returns while exposing investors to foreign exchange and geopolitical risks.