Investment strategy for participating life insurance product

A diversified investment approach targeting stable and sustainable returns

The participating life insurance product is based on a diversified investment strategy, designed to take advantage of a long-term investment horizon. Leveraging our in-depth knowledge of the various underlying asset classes, we structure the investment portfolio to generate a high return with a low-to-moderate level of risk.

Our strategy is based on intelligent risk-taking, which is essential to achieving higher long-term investment returns.

Key principles of the strategy

Exposure to compensated long-term risks

The portfolio is exposed to a variety of compensated long-term risks, including those related to fluctuations in stock markets, credit, and reduced asset liquidity.

Reduced risk through diversification

Investments are carefully diversified within and between asset classes, as well as over time, to ensure controlled risk management.

Inclusion of complementary investments to traditional approaches

Our investment strategy stands out by incorporating a portion of alternative investments and specialized strategies, which help improve the portfolio’s risk/return profile.

Why is our investment strategy beneficial for participating accounts?

Relatively high expected returns
An optimal mix of traditional and non-traditional asset classes provides the advantages of a long-term horizon and low liquidity requirements to achieve a higher return on its underlying investment portfolio.
Reduced risk through increased diversification
Diversifying sources of return and management approaches helps reduce investment portfolio volatility.

A strategy that also benefits from active management

Our investment strategy also uses active management, providing higher expected returns without increasing risk.

Learn more about active management

What is active management?

With active management, managers select the securities they want in their portfolio based on their convictions and the economic context, while controlling risk. Their goal is to outperform simple index management, which consists of systematically buying all the securities in a benchmark index without any special analysis.

Active management mandates in the participating product:

Quantitative or fundamental management of publicly traded assets
Active management of all alternative investments by default (index-based approaches do not exist given the unique nature of these assets).

Diversifying active management approaches for more stable added value

The use of different active management mandates allows access to specific investment expertise, the combination of which provides additional diversification and strengthens portfolio resilience.

Investment expertise from Desjardins Global Asset Management (DGAM)

Policyowners benefit from the expertise of Desjardins Global Asset Management’s (DGAM) specialized portfolio management team. DGAM was founded in 1998 and is today one of Canada’s largest asset managers, with in-house expertise in fixed-income securities, public equities and real assets (infrastructure, real estate) across a variety of investment vehicles.

Recognized institutional capacity

DGAM also offers strategic asset allocation services to its clients based on their objectives, investment horizon and risk tolerance. As at March 31, 2026, DGAM managed over $129 billion* in institutional assets on behalf of insurance companies, pension funds, endowment funds, non-profit organizations and corporations across Canada.

A rigorous and responsible approach

DGAM’s team of over 100 investment professionals develops in-depth investment strategies. Prudent risk management and responsible investment practices are incorporated into the investment process, creating long-term value for clients. Plus, DGAM has been an active signatory of the Principles for Responsible Investment (PRI) since 2017.

DGAM also teams up with reputable sub-managers for certain asset classes, particularly for high-yield credit and some alternative investments.

* Source: Desjardins Global Asset Management

Composition of the participating policies account (selling products)

As at December 31, 2025

Asset class	Invested assets (M$)	Proportion (%)	Target range (%)
Cash and short-term investments	0.9	1.0	0 to 5
Government bonds	13.2	14.9	30 to 55
Corporate bonds	8.8	9.9
Mortgages and commercial loans	11.5	12.9
High-yield bonds	4.9	5.5	5 to 15
Bank loans	4.2	4.8	5 to 15
Preferred shares	5.3	6.0	0 to 10
Fixed income	48.8	55.0	45 to 75
Common shares	11.5	13.0	5 to 25
Private equity	5.3	6.0	0 to 15
Private debt*	5.3	6.0	0 to 15
Infrastructure	8.0	8.9	0 to 15
Real estate	7.1	8.0	0 to 15
Alternative investments	25.7	28.9	20 to 40
Specialized strategy (market neutral)	2.8	3.1	0 to 5
Total	88.8	100

* Private debt is both a form of fixed income and a sub-category of alternative investments. The type of private debt included in the portfolio gives it a projected risk-return profile closer to the other aspects of the alternative investments portion of the portfolio than the fixed income portion.

Rate of return on investments in participating account: 6.74% net of fees 2025 returns

Source : Desjardins Global Asset Management

Notes: The table above reflects cash investments in the portfolio, which in turn reflect the strategy for the desired portfolio (longer horizon).

About the asset classes

Cash and short-term investments

The cash and short-term investments portfolio consists mainly of debt securities with maturities of less than one year. While they are a source of current yields, their primary role is to provide the liquidity necessary to manage the portfolio. Their very low volatility also reduces portfolio risk exposure.

Mortgages and commercial loans

The portfolio contains mostly mortgages issued to businesses and public sector entities for different types of real estate in Canada’s major urban centres. These assets play a similar role to corporate bonds, while providing additional compensation due to their illiquidity.

Government bonds

The government bond portfolio is the defensive part of the strategy. It provides regular interest coupons while reducing portfolio risk exposure.

Corporate bonds and high-yield credit

The portfolio contains bonds issued by Canadian and foreign companies in various sectors. These high-quality, high-yield securities can enhance the portfolio’s performance by providing credit spreads that have historically covered most of the additional credit risk. High-yield securities may include bank loans traded on the secondary market. These loans have similar features to high-yield bonds in terms of their credit risk and expected long-term returns. Since they are variable-rate instruments rather than fixed rate, they diversify exposure to credit risk.

Quality of the bonds and bank loans portfolio

As at December 31, 2025

Portfolio allocation credit ratings	Provincial bonds (%)	Corporate bonds (%)	High-yield bonds (Alliance Bernstein) (%)	Bank loans (Oak Hill Advisors) (%)	Total weighting (%)
AAA	0	1.2	0	0	0.4
AA+ to AA-	99.0	32.0	0.4	0	50.3
A+ to A-	1.0	38.9	1.4	0	13.9
BBB+ to BBB-	0	27.8	8.8	1.7	11.0
BB+ to BB-	0	0	45.3	16.2	8.5
B+ to B-	0	0	43.9	82.1	15.8
Below B and unrated	0	0	0.5	0	0.1
Total	100	100	100	100	100

Source: Desjardins Global Asset Management

Preferred shares

These securities are often presented as a cross between common shares and corporate bonds. Preferred shares typically provide high and stable dividend payments. The use of such as an asset class helps to optimize portfolio diversification. At this time, the portfolio includes only Canadian securities.

Common shares

Common shares are beneficial in a diversified portfolio. They offer potential for long-term growth through capital appreciation and dividends. Owning shares requires accepting fluctuations in companies’ valuations and in the economic cycle. The portfolio is diversified across Canadian, US and international equities (other developed and emerging markets).

Alternative investments

Alternative investments are made up of a number of asset classes which have in common that they are traded outside the markets, resulting in lower volatility and less liquidity. These assets may consist of equities, debt securities or real assets (such as real estate or infrastructure).

These investments also offer good diversification compared to traditional assets. They provide investors with higher returns through compensation for reduced liquidity or they can create value through full asset control and the judicious use of financial leverage.

Specialized strategies

Specialized strategies round out the portfolio. They’re designed to be independent of market direction. The portfolio includes 2 market neutral strategies containing short positions financing long positions in equity market (specific securities, sector indices or regional indices), with net performance on top of the money market returns. This strategy aims to achieve stable positive returns, low volatility and low correlation with the rest of the portfolio

Want to learn more about the strategy and performance of the participating policies account?

Our investment strategy and the operation of the participating policies account are based on a rigorous and structured approach. These elements are detailed in the documents below.

View our brochures:

The content of this page was prepared by Desjardins Global Asset Management (DGAM) for information purposes only.

The information on this page is provided solely for illustrative and discussion purposes. The information was obtained from sources that DGAM believes to be reliable, but is not guaranteed and may be incomplete. It is current as of the date indicated on this page. DGAM assumes no responsibility for updating this information or for reporting any new developments concerning the topics or securities discussed.

The information presented should not be construed as investment advice or recommendations to buy or sell securities or make specific investments. Under no circumstances should this document be considered or used for the purpose of an offer to purchase units in a fund or any other offer of securities in any territory. Nothing on this page should be construed as a declaration that any recommendation contained in it is appropriate for an investor’s circumstances. Investors should always conduct their own verification and analysis of this information before taking or refraining from taking any action involving the securities or markets discussed on this page.

The information herein is general in nature and used to illustrate and present examples relating to DGAM’s management capabilities. All views, comments and opinions are subject to change without notice. The information presented on market conditions represents a summary of DGAM’s observations with respect to the markets as a whole on the date indicated. Forecasts may differ based on management style, objectives, opinions or investment philosophy.

This information is confidential and intended only for representatives who are registered with a securities regulatory authority. At no time should this information be shared with investors or included in promotional materials.