Investors turn to a variety of investment products in search of higher yield and income

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Covered calls, private credit and real estate, rate reset preferred shares and bonds are some of the investment vehicles that advisors see opportunities in

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Some clients don’t fully recognize the downside risks of the strategies, along with the fees involved. They also don’t understand they’re sacrificing some of the upside in exchange for income, she adds. “They didn’t understand why they weren’t protected when markets went down,” Mr. Feindel says. “There’s this whole idea that covered calls protect you and they don’t. If the markets go down, you’ll lose that amount. When the markets go up, you just got a higher dividend because you’re receiving those options.”In terms of private credit, Ms.

Private credit funds provide access to a portfolio of loans, typically to private corporations in the small- to mid-cap space, Ms. Crowe explains, noting that interest rates are typically higher than traditional bank loans. “It’s important for clients to know that this is a long-term investment horizon,” she says. “It needs to be used specifically in those situations in which clients have no need to draw on those funds in the immediate term.”

“Given the strong rents we have seen in Canada, they have demonstrated solid net operating income growth over the past several years,” she says.

 

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