Property values have continued to soften in many markets. In this environment, the security and discipline behind Armada’s mortgage portfolio remains an important consideration for investors. Over its 30 years in business, Armada has navigated many storms of economic volatility and market corrections.

The majority of Armada’s mortgage terms are one year, with approximately 60% of the portfolio turning over in the past year. As mortgages are renewed or newly underwritten, current appraisals are obtained to ensure property valuation remains up to date. For mortgages extending beyond the standard period, a new appraisal is obtained, providing continued oversight of the underlying security.

Encouragingly, during the previous two quarters we had seen foreclosures rise well above our target threshold, however we have successfully reduced the foreclosures well below our threshold to a year to date low. In addition, new arrears files have been trending sideways; managements’ stress tests of arrears files do not indicate expected losses. Armada’s fund focuses on a broad range of historically stable property types across Canada, which combined with conservative LTVs, disciplined underwriting, and stress testing has been designed to provide resilience through variable conditions.

This strategy allows Armada’s portfolio to pivot alongside the market and adjust our lending strategy to meet the market where it is growing. Work is underway to introduce construction lending in Alberta, where development activity continues to present opportunities. By selectively expanding into areas of market strength, diversification can be maintained without compromising our principles.

Our underwriting team follows strict guidelines covering trade areas, population demographics, maximum loan sizes, property use, and other factors. Armada’s weighted average Loan-to-Value ratio currently sits at 45%, well below our 60% ceiling, providing meaningful capital protection even in a softening market. This discipline is reflected in our 30-year track record of a 7.05% average annual return with a standard deviation of less than 1%, a level of consistency that can be difficult to match among public and semi-liquid private fixed-income credit products.

While other funds may be taking on additional risk in a slower market, Armada remains anchored to the principles that have guided the company for 30 years; lend conservatively, maintain strong security, diversify appropriately, and adapt as market conditions change.