Market Commentary
For the third quarter of 2025, the Caldwell North American Fund (CNA or Fund) gained 3.3% versus a gain of 11.4% 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, Materials, Information Technology, and Communication Services were relative outperformers, whereas Consumer Staples, Industrials, and Healthcare underperformed.
Portfolio Commentary
Top contributors to the Fund’s performance in the third quarter of 2025 were L3Harris Technologies (LHX), Royal Bank of Canada (RY), and Thermo Fisher Scientific (TMO)2. LHX advanced through the quarter following strong results and raised full-year guidance driven by broad-based growth and margin expansion, supported by asset monetizations, cost efficiencies, and disciplined execution. Book-to-bill improved to 1.5x, with backlog rising to $7.6 billion, reflecting strong order momentum and sustained demand visibility. Improved foreign orders and an expanded cost-savings program further reinforced confidence in forward earnings and cash flow. Management’s upgraded outlook and continued operational momentum drove a positive market reaction, highlighting strengthening confidence in the company’s long-term growth trajectory. RY rerated higher during the quarter as it delivered broad-based growth across personal and commercial banking, wealth management, and capital markets, supported by improved operating leverage and disciplined expense control. Credit performance stabilized, with management maintaining a cautious but confident outlook. Efficiency gains from the HSBC integration and cost discipline reinforced margin expansion and profitability. Higher fee-based income, strong market-related activity, and continued progress on capital markets momentum contributed to robust returns. Management reaffirmed its long-term return targets, while upward estimate revisions and a constructive operating environment strengthened investor confidence in sustained earnings growth and valuation premium. TMO advanced following strong quarterly earnings and a notable increase in its outlook. Its results were supported by accelerating demand in biopharma and improved visibility into growth across key end markets. Management raised near-term earnings expectations and provided a refreshed multi-year framework emphasizing gradual margin expansion and steady organic growth. The update helped reset expectations while reinforcing long-term confidence in the company’s market-share gains and recurring revenue model. Investors responded positively to clearer growth visibility, improved capital allocation flexibility, and evidence of recovery in core laboratory and bioproduction demand. The combination of better-than-expected results, a constructive outlook, and a more balanced growth plan strengthened sentiment around its ability to sustain premium profitability and steady earnings growth.
During the third quarter of 2025, the Fund initiated positions in Fiserv (FI), Synopsys (SNPS), Cenovus Energy (CVE), and ServiceNow (NOW).
FI is a global leader in payments and financial technology, providing integrated solutions for financial institutions and corporate clients. The company offers account processing and digital banking platforms, card issuing and network services, and merchant acquiring through its Clover cloud-based point-of-sale and business management system. The company is benefiting from accelerating Clover adoption, supported by expansion into new international markets and partnerships that broaden distribution and merchant reach. A growing mix of higher-margin value-added services and hardware within Clover is enhancing profitability and recurring revenue visibility. Strong relationships with financial institutions and leadership stability under a new CEO reinforce operational execution, while continuous innovation across embedded finance and digital payments poises the company for sustained earnings growth.
SNPS is a global leader in Electronic Design Automation (EDA) and semiconductor intellectual property (IP), providing integrated software and hardware solutions that enable the design and verification of advanced chips and systems. The company’s tools power innovation in areas such as artificial intelligence, multi-die architectures, and automotive semiconductors. Synopsys is benefiting from the successful acquisition of Ansys, which expands its capabilities into Multiphysics simulation and creates an integrated “silicon-to-systems” design platform with significant cross-sell opportunities. Advancements in its AI-driven design automation suite, including the Synopsys.ai and AgentEngineer platforms, are improving engineering productivity and deepening customer engagement. Strong demand for EDA software, a growing base of recurring revenue, and expanding exposure to high-performance computing and AI markets reinforce long-term earnings visibility and position the company for sustained margin expansion.
CVE is a leading integrated oil and gas company with a balanced portfolio spanning oil sands, conventional production, offshore operations, and downstream refining assets in Canada and the United States. The company’s integrated model enhances margin stability across commodity cycles by capturing value from production through refining and marketing. The company is benefiting from continued operating efficiency improvements and disciplined cost control, driving stronger cash flow and margin expansion. Management remains focused on balance sheet strength and a shareholder-friendly capital return framework that allocates free cash flow between debt reduction and dividends or buybacks. With a diverse asset base, strong execution track record, and improving transparency around future growth opportunities, the company is expected to deliver sustainable cash flow growth.
NOW is a leading enterprise cloud software company that enables organizations to automate workflows across IT, HR, customer service, and operations. Its unified platform streamlines business processes and improves productivity for global enterprises. The company is benefiting from strong subscription growth, record backlog expansion, and rising adoption of AI-driven offerings like Now Assist and PRO+, which enhance customer value and monetization. Consistent execution, expanding margins, and strong free cash flow highlight operational strength, while deep partnerships and growing industry adoption support its trajectory of durable growth.
Looking Forward
Inflation, interest rates, tariffs and the state of the economy continue to be the most prevalent themes in 2025. Macroeconomic forces are still the most dominant factors driving the markets. If inflation remains at a manageable level, central banks may be able to orchestrate a soft landing for the economy, avoiding a typical recession. However, if inflation elevates to undesirable levels again, a harder landing may be necessary where interest rates strain consumer spending, investments, and corporate profits, ultimately resulting in a classic recession with increased unemployment. While economic uncertainty is a predominant risk in the markets today, we remind investors that one of the Fund’s investment principles is to protect capital by seeking reasonable valuations. To that end, we think the Fund’s value tilt positions it well for the uncertain environment. History has taught us that crisis creates new opportunities and for those investors with multi-year investment horizons, we will continue to manage portfolios based on our investment principles of protecting and growing our investors’ capital through discounted valuations, strong balance sheets, good management teams and attractive business environments.
1Series F, total return CAD terms
Standard performance as at September 30, 2025:
Caldwell North American Fund Series F: 1 Year: 9.4%, 3 year: 14.3%, 5 year: 12.0%, 10 year: 7.9%, Since Inception (August 8, 2014): 7.6%.
50% S&P/TSX Composite Total Return Index and 50% S&P500 Total Return Index: 1 Year: 25.0%, 3 year: 23.6%, 5 year: 17.3%, 10 year: 14.0%, Since Inception (August 8, 2014): 13.1%.
All data is as of September 30, 2025 sourced from Capital IQ, unless otherwise specified.
2First purchased: LHX 12/1/2020, RY 2/24/2025, TMO 8/7/2024.
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: October 22, 2025.