| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.4% | 1.4% | 8.2% |
| 2025 | 2024 | 2023 | 2022 |
|---|---|---|---|
| 8.2% | 12.0% | 5.4% | -7.3% |
The Purpose Credit Opportunities Fund returned 8.2% in 2025, outperforming passive high-yield strategies amid a challenging fixed income environment. Manager Sandy Liang maintains conviction in secular defense spending growth, initiating positions in MDA Space and Top Aces to capitalize on great-power rivalry and NATO spending targets. The team continues emphasizing data center-driven electricity demand, though recently downsized AI-related positions due to valuation concerns while maintaining exposure through Fluence Energy and Bloom Energy bonds. U.S. mortgage demand and Canadian preferred equity remain core conviction themes supported by resilient employment and economic fundamentals. The U.S. economy shows firm footing with growth revisions trending higher, driven by the One Big Beautiful Bill Act, data center spending, and lower rates. However, traditional fixed income faces headwinds from massive government deficits increasing bond supply. Treasury yields appear fairly valued relative to nominal GDP growth. The Fund's mid-6% internal yield and defensive positioning reflect cautious optimism amid mixed market conditions and policy uncertainty.
The Fund focuses on high-yielding credit opportunities across defense, energy infrastructure, and mortgage sectors, capitalizing on secular trends in defense spending, data center electricity demand, and U.S. economic resilience while navigating challenges from rising government deficits and bond yield trends.
The U.S. economy appears to be on firm footing with growth estimate revisions trending higher, supported by favorable factors including the One Big Beautiful Bill Act, massive data center spending, and lower short-term interest rates. The outlook for traditional fixed income remains murky due to massive government budget deficits, while the team maintains conviction in defense spending, data center electricity demand, and mortgage themes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 19 2026 | 2025 Q4 | BE, FLNC, MDA.TO | Canada, credit, Data centers, defense, Energy Storage, fixed income, high yield, Mortgage | MDA CN | The team views the secular increase in global defense spending as an investable theme due to long-term great-power rivalry and U.S. assertiveness on NATO defense… |
| Oct 20 2025 | 2025 Q3 | - | AI, Bonds, credit, energy, Preferreds | - | The Purpose Credit Opportunities Fund outperformed peers, driven by high-conviction credit positions in electricity and energy firms tied to AI data center demand. The fund… |
| Jul 15 2025 | 2025 Q2 | FLNC, XBB CN | capital structure, credit, risk reward, secular themes, Yield |
FLNC CPX CN |
The letter focuses on credit opportunities shaped by secular themes such as data center power demand, housing shortages, and capital structure complexity. Management stresses scenario-based… |
| Apr 13 2025 | 2025 Q1 | XBB CN | - | - | - |
| Jan 15 2025 | 2024 Q4 | XBB CN | - | - | - |
| Oct 11 2024 | 2024 Q3 | XBB CN | - | - | - |
| Jul 13 2024 | 2024 Q2 | XBB CN | - | - | - |
| Apr 10 2024 | 2024 Q1 | XBB CN | - | - | - |
| Jan 12 2024 | 2023 Q4 | XBB CN | - | - | - |
| Oct 10 2023 | 2023 Q3 | - | - | - | - |
| Jul 12 2023 | 2023 Q2 | - | - | - | - |
| Apr 13 2023 | 2023 Q1 | - | - | - | - |
| Jan 16 2023 | 2022 Q4 | XBB CN | - | - | - |
| Oct 13 2022 | 2022 Q3 | - | - | - | - |
| Jul 12 2022 | 2022 Q2 | - | - | - | - |
| Apr 10 2022 | 2022 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure |
Defense SpendingThe entire world is rapidly rearming off an extremely low base of defense spending. This exposure focuses on companies that make armaments for nation state security and materially outperformed for the year. |
Defense Armaments Rheinmetall Palantir RTX | |
Energy StorageGRID is the largest owner of operational battery storage projects in the UK with over 1GW of capacity and substantial pipeline. Additional tolling agreements and long-term refinancing enable CAPEX programme for augmentation and new capacity. Expected to generate material free cash flow for buybacks or dividends. |
Battery Storage Grid Storage Energy Infrastructure Tolling Agreements CAPEX | |
MortgageFalling interest rates and federal support for housing should drive a continued rebound in mortgage origination volumes, which should benefit mortgage originators and credit bureaus. FICO launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
Mortgage Origination Housing Credit Scoring Lending Real Estate | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade | |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure | |
| 2025 Q2 |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 19, 2026 | Fund Letters | Sandy Liang | MDA CN | MDA Space Ltd. | Industrials | Aerospace & Defense | Bull | New York Stock Exchange | Credit, Defence, Geopolitics, Satellites, yield | Login |
| Jul 15, 2025 | Fund Letters | Sandy Liang | FLNC | Fluence Energy, Inc. | Industrials | Electrical Equipment | Bull | NASDAQ | AES, Battery Storage, Convertible Bonds, Credit, data centers, Siemens, utilities | Login |
| Jul 15, 2025 | Fund Letters | Sandy Liang | CPX CN | Capital Power Corporation | Utilities | Independent Power and Renewable Electricity Producers | Bull | New York Stock Exchange | Baseload Power, credit quality, natural gas, Preferred equity, utilities, yield | Login |
| TICKER | COMMENTARY |
|---|---|
| BE | Bloom Energy is a provider of solid oxide fuel cells that play a critical role in delivering clean, reliable, always on power at scale. AI data centers require an enormous amount of power and one of the key challenges to date has been the inability of power grids to supply the necessary electricity to meet the constant and growing demands from AI workloads. Bloom's Energy Server fuel cells help address this issue, generating cost-efficient, reliable power onsite, converting fuels like natural gas, biogas and hydrogen into electricity without combustion. During the quarter, the company announced better than expected results with added optimism from a $5B partnership with Brookfield as the preferred onsite power provider for the company's global AI factories. |
| FLNC | The largest contributors to performance in 2025 were Fluence Energy bonds. The Team recently initiated a position in MDA Space (MDA) 7% of 2030 at par value (100.00) and added to its position in Top Aces (TOPACE) 9% of 2030 at close-to-par value. |
| MDA.TO | MDA is a publicly-traded Canadian company ($4.6 billion equity capitalization) that manufactures and provides services in satellite systems, robotics and space operations, and geo-intelligence for a broad range of customers, including governments, space agencies, and defence and aerospace contractors. |
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