Market Commentary
For the first quarter of 2026, the Caldwell North American Fund (CNA or Fund) declined -3.1% versus a gain of 0.6% for the Fund’s benchmark, which comprises an equal blend of the S&P 500 Total Return Index and the S&P/TSX Composite Total Return Index1. From a sector standpoint Energy, Utilities, and Materials were relative outperformers, whereas Information Technology, Consumer Discretionary, and Communication Services underperformed.
Portfolio Commentary
Top contributors to the Fund’s performance in the first quarter of 2026 were Cenovus Energy (CVE), L3Harris Technologies (LHX), and Motorola Solutions (MSI)2. CVE advanced after a strong quarter highlighted improving downstream performance and growing visibility into upstream production growth. Refining results benefited from better reliability, stronger throughput, and improved market capture, while the next leg of upside could come from lowering U.S. downstream operating costs. At the same time, oil sands growth continued to build and the path toward roughly one million barrels of daily production became more visible. With strong free cash flow, ongoing buybacks and dividends, and room for further operational improvement, confidence improved in the company’s medium-term growth and shareholder return outlook. LHX gained ground as investors responded positively to the planned separation of its missile business, which highlighted the value of a faster-growing and more capacity-constrained franchise. The transaction was seen as creating a more focused defence asset with stronger long-term growth potential and a structure that could support significant investment ahead of demand. Later in the month, results also reinforced the broader story as the company delivered solid organic growth, strong cash flow, and healthy order activity. With improving visibility into portfolio value creation, defence demand, and cash generation, investor sentiment strengthened. MSI rerated higher as results and guidance reinforced confidence in durable demand, recurring revenue growth, and expanding margins. Momentum remained strong across software, video, and command centre offerings, while double-digit product order growth and a healthy backlog supported visibility into another strong year. Investors were also encouraged by growing traction in AI-enabled public safety software and faster expansion in defense and unmanned systems following the Silvus acquisition. With a larger mix of software and services supporting profitability and cash flow, confidence increased in the durability of growth.
During the first quarter of 2026, the Fund initiated positions Waste Connections (WCN) and Stella-Jones (SJ).
WCN is a leading North American waste services company with a strong market position supported by localized networks, extensive disposal infrastructure, and high barriers to entry across collection, transfer, and landfill assets. The company benefits from the defensiveness of its core markets and its ability to sustain pricing discipline while continuing to optimize contract quality. Margin expansion is being driven by greater vertical integration of the waste stream, as higher internalization allows more waste to move through its own network and disposal assets rather than third-party channels. Investments in assets such as Arrowhead further strengthen this strategy by improving throughput, expanding internalization opportunities, and enhancing competitive positioning in attractive markets.
SJ is a market leader in utility poles and railway ties, with a defensible moat supported by scale, long-standing customer relationships, and concentrated positions in core infrastructure markets. The company is also expanding strategically into steel and other pole-adjacent markets, opening a new growth silo tied to transmission spending, grid hardening, and broader electrification tailwinds. At the same time, operational efficiencies, optimized procurement, and process improvements are supporting margin expansion across the business. With leadership in its legacy markets and growing exposure to fastergrowing steel-adjacent opportunities, it is well positioned for durable long-term growth.
Looking Forward
The state of the economy, inflation, interest rates, tariffs, and geopolitical tensions remain central themes in 2026, with macroeconomic forces continuing to play a significant role in shaping market performance. At the same time, Artificial Intelligence (AI) has emerged as a transformative technology, driving a global investment arms race as companies and countries seek to position themselves at the forefront of this shift. Rapid earnings growth and market capitalization expansion among AI-exposed companies have contributed to historically high levels of market concentration, particularly in U.S. equity markets. While there is no immediate evidence of a reversion, questions around the sustainability of current investment levels and the pace of monetization are likely to become increasingly important drivers of investor sentiment. From a macroeconomic perspective, a key risk remains the potential re-acceleration of inflation. Recent and prospective tariff actions increase the risk of higher input costs, supply-chain inefficiencies, and reduced pricing flexibility for businesses, which could ultimately be passed on to consumers. If inflation remains contained, central banks may still be able to achieve a soft landing, allowing economic growth to moderate without triggering a traditional recession. However, should inflation re-emerge, more restrictive monetary policy may be required, placing pressure on consumer spending, corporate investment, and profit margins, and potentially resulting in a more pronounced economic slowdown and rising unemployment.
While economic uncertainty remains elevated, we remind investors that one of the Fund’s core investment principles is capital protection through disciplined valuation. In this context, we believe the Fund’s value tilt and diversified positioning across sectors and business models leave it well-situated for a range of potential outcomes. History has shown that periods of heightened uncertainty often create opportunities for investors with multi-year investment horizons. Accordingly, we will continue to manage the portfolio in line with our investment principles, focusing on companies with attractive valuations, strong balance sheets, capable management teams, and durable business models that can compound value over time.
1Series F, total return CAD terms
Standard performance as at March 31, 2026:
Caldwell North American Fund Series F: 1 Year: 0.4%, 3 year: 9.1%, 5 year: 8.2%, 10 year: 7.2%, Since Inception (August 8, 2014): 6.8%.
50% S&P/TSX Composite Total Return Index and 50% S&P500 Total Return Index: 1 Year: 24.3%, 3 year: 20.5%, 5 year: 14.9%, 10 year: 13.9%, Since Inception (August 8, 2014): 12.8%.
All data is as of December 31, 2025 sourced from Capital IQ, unless otherwise specified.
2First purchased: CVE 8/22/2025, LHX 12/1/2020, MSI 2/5/2021.
The information contained herein provides general information about the Fund at a point in time. Investors are strongly encouraged to consult with a financial advisor and review the Simplified Prospectus and Fund Facts documents carefully prior to making investment decisions about the Fund. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Rates of returns, unless otherwise indicated, are the historical annual compounded returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.
Publication date: April 14, 2026.