Balanced Strategies
Balanced strategies are designed for investors seeking a combination of long-term growth and stability. By investing across both equities and fixed income, they aim to participate in market upside while helping to reduce the impact of volatility over time.
Pembroke’s balanced portfolios combine equity and fixed-income investments within a single, diversified structure. This integrated approach allows the portfolio to adapt to changing market conditions while maintaining a consistent focus on long-term outcomes.
These strategies are often used as a core component of a client’s portfolio, providing a foundation for growth while supporting overall risk management.
Within our balanced approach, you can choose between two strategies with different geographic exposures and portfolio characteristics.
Strategies
The Pembroke Canadian Balanced Strategy is a multi-asset portfolio designed to provide investors with a balanced combination of long-term capital growth and income through exposure to both equity and fixed-income securities.
Strategy Overview
The Pembroke Canadian Balanced Strategy invests primarily in Canadian securities and is intended to deliver diversified returns across market environments by allocating capital across asset classes with differing risk and return characteristics.
The strategy is structured as a comprehensive investment solution for investors seeking diversified exposure within a single portfolio. By combining Pembroke’s equity investment expertise with a professionally managed fixed-income component, the strategy seeks to deliver a more stable return profile than an all-equity approach while maintaining meaningful participation in long-term growth opportunities.
By maintaining exposure to both equities and fixed income, which often respond differently to market conditions, the strategy seeks to smooth returns over time while supporting income generation and capital growth.
Within this balanced framework, asset allocation decisions are implemented with a long-term perspective and adjusted as necessary to manage portfolio-level risk and maintain alignment with the strategy’s objectives, rather than to pursue short-term tactical positioning. While the strategy maintains meaningful exposure to both asset classes, relative weightings may adjust over time in response to valuation, risk considerations, and portfolio-level objectives, rather than short-term market forecasts.
The equity component emphasizes Canadian companies that exhibit attractive growth and income characteristics. Dividend-paying equities play an important role within the equity allocation, supporting income generation, contributing to total return, and helping to moderate volatility.
The fixed-income component is designed to provide income, capital stability, and diversification. Exposure includes a diversified mix of high-quality government and investment-grade corporate bonds, selected with an emphasis on credit quality, liquidity, and risk-adjusted return potential. Fixed-income investments are managed with a focus on capital preservation, steady income generation, liquidity, and providing ballast during periods of equity market volatility.
The strategy may invest a limited portion of assets in foreign securities where diversification benefits or compelling opportunities exist. Any foreign exposure is evaluated using the same disciplined investment criteria applied to Canadian holdings and is intended to complement the strategy’s Canadian focus.
Overall, the Pembroke Canadian Balanced Strategy seeks to deliver a more stable return profile than an all-equity portfolio while offering greater long-term growth potential than a fixed-income-only approach. It is designed for investors who value diversification, income, and professional portfolio management within a single investment solution.
Who Should Invest?
The Pembroke Canadian Balanced Strategy is suited to investors seeking a diversified portfolio that balances growth and income and who prefer a professionally managed, multi-asset investment approach.
The strategy may be appropriate for investors who:
- Seek a combination of long-term capital appreciation and current income
- Have a low-to-medium risk tolerance
- Prefer a single, diversified portfolio rather than managing separate equity and fixed-income investments
- Have at least a medium investment horizon
The strategy may be particularly attractive to investors who wish to participate in equity market growth while mitigating volatility through fixed-income exposure. It can also appeal to investors transitioning from a growth-oriented portfolio toward a more balanced approach, or to those who value income as part of their total return.
Within a broader investment plan, the Pembroke Canadian Balanced Strategy may serve as a core holding, providing foundational exposure to Canadian equities and bonds. It can also be complemented by more specialized strategies for investors seeking additional growth, income, or geographic diversification.
Investors should be comfortable with some level of portfolio fluctuation, as equity market movements will influence returns. However, overall volatility is generally expected to be lower than that of an all-equity strategy due to the stabilizing role of fixed income. The strategy is not designed to eliminate volatility, but rather to manage it in a disciplined and intentional manner. Pembroke classifies the Canadian Balanced Strategy as a low-to-medium risk multi-asset strategy.
Who Should Not Invest?
The strategy is not suitable for investors seeking maximum capital growth through full equity exposure, nor for those seeking capital preservation comparable to money market investments or guaranteed income solutions. Investors with very short-term liquidity needs, those unable to tolerate periodic market volatility, or those seeking a narrowly focused investment mandate may find the strategy misaligned with their objectives.
Investment Strategy
The Pembroke Canadian Balanced Strategy is managed using a disciplined, research-driven investment process that integrates asset allocation, security selection, and ongoing risk management.
Asset Allocation
The portfolio maintains exposure to both equities and fixed income within a balanced framework. Under normal market conditions, the portfolio is constructed with a target allocation of approximately 70% equities and 30% fixed income. This strategic mix reflects Pembroke’s long-term view of balanced investing, combining meaningful participation in equity growth with the stabilizing role of fixed income. Asset allocation decisions are informed by market conditions, valuation assessments, and risk considerations, with adjustments made incrementally. While the strategy allows for flexibility, it remains anchored to its balanced objective and does not seek to make extreme or short-term tactical shifts.
Equity Strategy
Equity investments focus primarily on Canadian companies selected using Pembroke’s bottom-up investment approach. The equity component emphasizes business quality, sustainable growth, dividend durability, and long-term value creation. Companies are evaluated based on financial strength, competitive positioning, cash flow generation, and management alignment.
Dividend-paying equities with sustainable and growing dividend profiles play an important role within the equity allocation, contributing to income generation and supporting total return. A limited allocation to foreign equities may be included where it enhances diversification or provides access to attractive opportunities not available in the Canadian market.
Fixed-Income Strategy
Fixed-income investments are selected to provide income, capital stability, and diversification through exposure to government and selectively chosen investment-grade corporate bonds, with diversification across issuers, sectors, and maturities. Fixed-income investments are actively managed to control interest rate sensitivity, manage credit risk, and maintain adequate liquidity.
The fixed-income component is intended to act as a stabilizing force within the portfolio, helping to offset equity market volatility and providing a dependable source of income.
Equity and Fixed Income Implementation
At present, the equity component of the Pembroke Canadian Balanced Strategy is implemented primarily through the Pembroke Dividend Growth Strategy, reflecting an emphasis on high-quality Canadian equities with sustainable dividend profiles and long-term growth potential. The fixed-income component is currently implemented through a combination of the Pembroke Canadian Bond Strategy and the Pembroke Corporate Bond Strategy, providing diversified exposure to government and high-quality corporate bonds with a focus on capital preservation, income generation, and liquidity.
These underlying strategies are selected to align with the Balanced Strategy’s objectives and may evolve over time as market conditions and investment considerations change.
Risk Management and Rebalancing
Risk management is embedded throughout the investment process. The portfolio is monitored continuously to ensure alignment with the strategy’s objectives and risk profile. Rebalancing is conducted as needed to manage drift between asset classes and maintain diversification.
Diversification across asset classes, issuers, and securities is a core risk management tool. The strategy does not rely on leverage or speculative techniques and is managed with a long-term perspective focused on consistency and capital stewardship.
Environmental, social, and governance considerations are incorporated into the investment process as part of overall risk assessment, consistent with Pembroke’s responsible investment practices.
Accessing the Strategy
Investors may access this strategy by investing in the Pembroke Canadian Balanced Fund. The strategy may also be implemented through a separately managed account for clients with a discretionary management agreement. Additional information about the fund, including investment objectives, risks, fees, and expenses, is available in the fund’s prospectus.
The Pembroke Global Balanced Strategy is a diversified, multi-asset investment strategy designed to provide a balanced combination of long-term capital growth and income through exposure to global equity and fixed-income markets.
Strategy Overview
The Pembroke Global Balanced Strategy seeks to deliver attractive risk-adjusted returns by allocating capital across asset classes, geographies, and investment styles with differing risk and return characteristics.
The strategy is intended to serve as a comprehensive, globally diversified portfolio solution within a single investment. It is constructed using a fund-of-funds approach, investing primarily in a combination of equity and fixed-income funds, including Pembroke-managed strategies and select third-party funds or exchange-traded funds where appropriate. This structure allows the portfolio to access specialist investment expertise and efficient market exposure through pooled vehicles, while benefiting from centralized oversight, rebalancing, and portfolio-level risk management.
Under normal market conditions, the strategy maintains a growth-oriented balanced asset mix, generally managed around an allocation of approximately 70% equities and 30% fixed income and defensive assets. This structure is intended to provide meaningful participation in global equity market growth while retaining a stabilizing allocation designed to moderate volatility and support income generation. As a result, the strategy exhibits a risk profile that is higher than a traditional 60/40 balanced strategy but materially lower than an all-equity portfolio, reflecting the diversification and risk-mitigation role of fixed income and other defensive assets.
Global diversification is a central feature of the strategy, reducing reliance on any single market or asset class. Fixed-income exposure is anchored in high-quality bonds, emphasizing capital preservation, income generation, prudent credit selection, and diversification benefits relative to equities. The strategy may also allocate a modest portion of assets to other defensive or diversifying exposures, such as cash or real assets, including a modest allocation to a gold exchange-traded fund, where these are deemed to enhance portfolio resilience, diversification, or inflation sensitivity.
Asset allocation is managed within a long-term, strategic framework consistent with the strategy’s balanced mandate. While the portfolio remains anchored to its long-term equity-to-fixed-income mix, allocations may be adjusted modestly over time in response to valuation and risk considerations. These adjustments are made with a long-term perspective and are not driven by short-term market timing. Rebalancing plays a central role in maintaining the intended risk profile and in systematically managing the interaction between asset classes through market cycles.
Overall, the Pembroke Global Balanced Strategy is designed to provide investors with a globally diversified portfolio that balances growth and income objectives, reduces reliance on any single market or asset class, and offers professional management of asset allocation, underlying exposures, and portfolio risk within a single investment solution.
Who Should Invest?
The Pembroke Global Balanced Strategy is suited to investors seeking a globally diversified portfolio that balances long-term capital growth and income and who value a professionally managed, multi-asset approach to investing.
The strategy may be appropriate for investors who:
- Seek exposure to global equity markets while moderating volatility through fixed-income and defensive allocations
- Have a moderate risk tolerance and a medium- to long-term investment horizon
- Prefer a single, diversified portfolio rather than managing multiple regional or asset-specific investments
- Value global diversification as a means of reducing home-country concentration and enhancing long-term outcomes
The strategy may serve as a core holding within a broader investment plan, particularly for investors who wish to diversify beyond Canada and gain exposure to global growth opportunities while retaining the stabilizing benefits of fixed income. It may also appeal to investors who appreciate a blend of active and passive investment approaches, where specialist active management is complemented by efficient broad-market exposure.
Investors should be comfortable with periodic fluctuations in portfolio value, including those arising from global equity markets and foreign currency exposure. While overall volatility is expected to be lower than that of an all-equity global strategy, returns will vary over time, and short-term drawdowns are possible, particularly during periods of equity market stress. Pembroke classifies the Global Balanced Strategy as a low-to-medium-risk global multi-asset strategy.
Who Should Not Invest?
The Pembroke Global Balanced Strategy is not suitable for investors seeking capital preservation comparable to money market instruments or guaranteed income products, or for those with very short-term liquidity needs. It may also be inappropriate for investors with a very low tolerance for market volatility or those unwilling to accept foreign market or currency exposure. Conversely, investors seeking maximum capital growth through full equity exposure or those with a preference for narrowly focused regional or sector-specific mandates may find the strategy insufficiently targeted for their objectives.
Investment Strategy
The Pembroke Global Balanced Strategy is managed using a disciplined investment process that integrates strategic asset allocation, selection of underlying investment funds, and ongoing portfolio-level risk management.
Asset Allocation
The strategy maintains exposure to both equities and fixed income within a growth-oriented balanced framework. The long-term asset mix is designed to reflect the return potential of global equities while incorporating fixed income and defensive assets to help manage volatility and support income. Adjustments to the asset mix are incremental, long-term, and valuation-aware, and are not driven by short-term tactical views.
Equity Strategy
Equity exposure is implemented through a diversified mix of underlying funds that provide access to global markets across regions, market capitalizations, and investment styles. These may include Pembroke-managed equity strategies, reflecting the firm’s expertise in select segments of the equity market, as well as external funds or exchange-traded funds used to efficiently capture broad market exposure where appropriate.
This approach allows the strategy to combine focused active management in areas where Pembroke believes it can add value with diversified exposure to larger or more efficient markets through passive or complementary active vehicles. Equity allocations are monitored on an ongoing basis to ensure alignment with portfolio-level objectives and diversification goals.
Fixed Income and Defensive Strategy
The fixed-income and defensive component is designed to provide income, capital stability, and diversification benefits relative to equities. Exposure is primarily achieved through Pembroke-managed bond strategies that emphasize high credit quality, disciplined duration management, liquidity, and active risk control, complemented at times by modest allocations to other defensive assets, such as cash or gold, where these are deemed to enhance portfolio resilience, including during periods of elevated inflation or market stress.
At present, the fixed-income component is implemented primarily through Pembroke’s Canadian Bond and Corporate Bond strategies, combining an emphasis on high-quality government and investment-grade bonds with selective exposure to corporate credit when appropriately compensated.
Risk Management and Rebalancing
Risk management is embedded throughout the investment process. Diversification across asset classes, geographies, managers, and investment styles is a central risk control mechanism. The portfolio is monitored on an ongoing basis, and rebalancing is conducted as needed to manage drift from target allocations and to maintain the intended risk profile.
Given its balanced structure, the strategy is expected to experience lower volatility than an all-equity global strategy, while still participating meaningfully in global equity market growth.
Accessing the Strategy
Investors may access this strategy by investing in the Pembroke Global Balanced Fund. The strategy may also be implemented through a separately managed account for clients with a discretionary management agreement. Additional information about the fund, including investment objectives, risks, fees, and expenses, is available in the fund’s prospectus.
