BCV Asset Management Inc. invests almost exclusively in investment grade bonds issued by federal and provincial governments and by corporations. These bonds have terms to maturity of up to ten years, which strikes a balance between the extra yield that can be earned by extending the term to maturity and the increased price volatility of longer-term bonds from changing interest rates. If we invest in provincial government or corporate bonds instead of federal government bonds, we carefully evaluate whether the extra yield is appropriate for the extra credit risk that we are taking. Also, if we invest in bonds of a longer term, we carefully evaluate whether the extra yield that is earned is appropriate for the extra term. Although the risk of default is very minor for investment grade bonds, we are careful to ensure that we are rewarded with extra yield for adding even small amounts of risk. We may invest in non-investment grade bonds, when suitable for specific portfolios, but only after careful consideration of the additional risk taken.