For 2022, we are expecting a similar rate of return as in 2021. Our 2022 target is to finish between 5.0% and 6.50%, after fees. The pandemic continues to drive a rural and suburban revival, meaning that mortgage demand in our area of strategic focus continues to be strong.
The difference will be in how we get there. In 2021 we started with strong returns that tapered off slightly after we exited a large, legacy residential development position in the back half of the year. Exiting these positions temporarily increases our cash, which pushes down monthly returns until we can redeploy it.
Large residential developments are no longer a part of our core investment strategy, and while we are pleased to be exiting another before the end of January, it means we are starting 2022 with monthly returns near or slightly below 5%. We expect continuous improvement on monthly returns throughout the remainder of the year as we redeploy this cash into high-quality, 1st residential mortgages in the form of new construction mortgages and/or purchases and refinances.
There is a very large, very real gap occurring in the more conservative portion of client investment portfolios that used to contain GIC’s and bonds. With inflation at current and forward-looking levels, these traditional asset classes and products are becoming far less attractive. We believe the Frontenac MIC is a more robust solution.
If you’re looking for a conservative, consistent, and reliable alternative yield solution that has historically returned 5.0% – 6.5% annually after fees, please give us a call. Let’s discuss how we may be able to support you, and your clients, going forward.
All the best for a healthy, prosperous, and a safe 2022! We look forward to connecting with you soon.
Gord Ross
Chief Sales Officer
W.A. Robinson Asset Management
