Canadian Value Momentum Fund Reports

July 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

July Recap: 

 

The Caldwell Canadian Value Momentum Fund (“CCVMF”) gained 3.2% in July versus a gain of 0.3% for the S&P/TSX Composite Total Return Index ("Index”). The CCVMF saw broad-based strength with 75% of its holdings out-pacing the Index return and half of its holdings gaining over 5%. As for the Index, Health Care (-13.3%), driven by weakness in cannabis stocks, was the worst performer, while Energy (-4.0%) continued to lag.

 

Top CCVMF performers in July were North American Construction Group (“NOA”: +17.3%) and Air Canada (“AC”: +14.4%). We have written in the past about earnings announcements being helpful catalysts to re-focus investors on company-specific fundamentals (versus macro noise) and that is exactly what happened with these two names.

 

NOA continued to post strong results on solid activity in core oil sands, ramping of third party repair and maintenance work and strong performance from recent acquisitions. The company provided an upbeat outlook which included incremental contract wins and guidance that exceeded analyst expectations.

 

Air Canada had a strong operational quarter that exceeded analyst expectations despite negative impacts from the grounding of Boeing's 737 MAX aircraft. The company is executing well on several initiatives designed to further increase shareholder value. 

 

No stocks were added to the portfolio in July.

 

The Fund held a 15.0% cash weighting at month end. The CCVMF has generated substantial value to investors over its long-term history driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 371 constituents in the Canadian Equity category and 5 of a total of 110 constituents in the Canadian Small/Mid Equity category.

 

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: August 15, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

June 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

June Recap: 

 

The Fund gained 1.7% in June versus a gain of 2.5% for the S&P/TSX Composite Total Return Index ("Index”). The Index continued to see wide dispersion in sector performance with Materials (+12.7%), led by Gold (+15.7%), and Consumer Discretionary (+6.6%) showing strong gains while Energy (-2.3%), Communication Services (-2.2%), and Consumer Staples (-1.9%) posted losses. 

 

Top CCVMF performers in June were Kirkland Lake Gold (“KL”: +20.7%) and Aecon Group ("ARE": +9.6%).

 

Kirkland continued to benefit from the strength in gold alongside the growing probability of U.S. rate cuts; however, we remind investors that the company also has strong company-specific growth drivers through strong production and discoveries in its world-class mines.

 

There was no company-specific news on Aecon but it seems that investors are weighing the company's record backlog against negative sentiment across the broader construction group. We expect company-specific fundamentals to ultimately prevail and look for a catalyst in this upcoming Q2 earnings season. 

 

Two stocks were added to the portfolio in June: Boyd Group ("BYD.UN") and Goeasy ("GSY").

 

Boyd operates vehicle collision and auto-glass repair centers in the U.S. and Canada (the U.S. accounts for 85% of revenue). The company has tripled its revenue over the past 5 years as it consolidates and brings institutional best practices to these fragmented markets and is looking to once again double its revenue going forward. Same-store-sales were 6.6% this past quarter as industry dynamics remain favourable with auto insurers consolidating vendor relationships and single-store operators struggle to compete with multi-shop peers.

 

Goeasy is a non-prime Canadian lender. Despite investor caution on the space (GSY trades at 9.9x consensus 2019 EPS estimate), credit trends remain stable and the stock made a new high following the company's investor day in May, in which it walked through the competitive environment and growth runway. From a competitive standpoint, GSY has a leadership position within the non-prime market with a strong brand, branch network and peer-leading performance, while online and payday loan players have struggled to gain traction. The business is highly profitable with a strong growth runway as it broadens its product offerings, distribution channels and geographic reach (GSY revenue is < $1 billion in a $186 billion non-prime market).

 

The Fund held a 13.0% cash weighting at month-end, down from 45.7% at the end of March. The fund has generated substantial value to investors over its long-term history driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 374 constituents in the Canadian Equity category and 5 of a total of 113 constituents in the Canadian Small/Mid Equity category.

 

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: July 11, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

May 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

May Recap: 

 

The Fund outperformed the S&P/TSX Composite Total Return Index (“Index”) by 260bps in May, declining 0.5% versus a loss of 3.1% for the Index. The Index saw wide dispersion in sector performance with Technology (+4.3%) and Gold (+3.3%) showing strong gains, while Health Care (-13.8%), Consumer Discretionary (-8.7%), and Financials (-5.1%) posted significant declines. The Fund continued its habit of out-performing a declining Index. Since inception (August 8, 2011), the Fund has now outperformed the Index in 28 of 35 down months for a 80% success ratio.

 

Top CCVMF performers in May were Air Canada (“AC”: +24.1%), Element Fleet Financial ("EFN": +17.7%) and Kirkland Lake Gold (“KL”:+7.9%).

 

We initiated a position in AC in late April and built up a full position by early May (thesis, below). The stock responded positively to two events: i) a Q1 report that was better than feared given disruption from the grounding of Boeing's 737 Max planes; ii) the announced acquisition of Transat which increases AC's focus on leisure product and has the potential for significant cost synergies.

 

EFN responded positively to solid Q1 results and a 10% increase to its 2020 EPS guidance, which suggests that management is making significant progress on its profitability plan.

 

While broad-based strength in gold helped, KL also traded higher on company specific news with a strong Q1 result that saw improved guidance at its Fosterville and Macassa mines alongside a 30%+ increase to the dividend. 

 

One stock was added to the portfolio in May: Air Canada ("AC"). 

 

Air Canada is Canada’s largest domestic and international airline serving more than 200 airports on six continents. The company has dramatically improved its business over the last several years, resulting in a significantly reduced cost structure, strong balance sheet, better cash flow generation, and higher return on invested capital. Despite this, the stock continues to trade at a meaningful discount to U.S. peers which, in turn, trade at a substantial discount to the broader market. There continue to be self-help levers for management to drive additional upside, including the addition of Aeroplan and Transat. 

 

The Fund held a 23.4% cash weighting at month end, down from 45.7% at the end of March. The cash weighting at the time of writing is 12.5% as two positions were initiated in early June. The fund has generated substantial value to investors over its long-term history driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 372 constituents in the Canadian Equity category and 5 of a total of 113 constituents in the Canadian Small/Mid Equity category.

 

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: June 13, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

April 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

April Recap: 

 

The Fund gained 2.4% in April versus a gain of 3.2% for the S&P/TSX Composite Total Return Index ("Index”). Sector performance for the Index was led by Consumer Discretionary (+7.0%), Technology (+6.4%) and Financials (+5.2%), partially offset by losses in REITs (-3.7%) and Materials (-2.5%) led by Gold (-5.5%). 

 

Top CCVMF performers in April were North American Construction Group (“NOA”: +12.1%) and Badger Daylighting ("BAD": +11.3%).

 

NOA rebounded after weaker performance in March. The company released a good "beat and raise" earnings report late in the month despite poor weather conditions, prompting analysts to increase price targets. The business outlook remains positive with a robust upcoming summer construction season and meaningful bidding opportunities. Despite significant price out-performance year-to-date, we believe substantial upside exists to fully reflect the company's transformation.

 

This is the 2nd consecutive month that BAD showed up as a top performer. While there was no incremental news in April, outside of a new CFO appointment, there is growing evidence that hydrovac excavation is gaining wider acceptance due to its safety and efficiency advantages over traditional techniques. The runway for growth is significant with BAD aiming to once again double its revenue base. 

 

As telegraphed in last month's note, we have initiated several new positions in the Fund. Three stocks were added to the portfolio in April: Brookfield Asset Management ("BAM.A"), Element Fleet Financial ("EFN") and DIRTT Environmental Solutions Ltd. ("DRT").

 

BAM.A is one of the largest alternative asset managers in the world with over $300 billion in AUM. They are value investors in the alternative  space (real estate, infrastructure, private equity) which is seeing secular tailwinds from institutional investors, increasing allocations to alternative asset classes. BAM.A has raised $20B in capital in the last 12 months and is expected to generate significant free cash flow over the coming decade, providing it with multiple levers for value creation.

 

EFN is the largest publicly traded fleet management company in North America. The new CEO has executed well on the turnaround story with material earnings improvement targeted over the next several years. We like turnaround stories, especially in uncertain economic climates, as value levers are in management's control and expect the stock's multiple to re-rate higher as ROE metrics improve.

 

DRT is another turnaround story that is also redefining commercial interior design and construction processes through its proprietary software and manufacturing capabilities. Despite a 20%+ 5-year revenue CAGR, virtually all senior management positions have been replaced so as to create a company that can scale the significant growth opportunity in front of it. The strategy is to leverage DRT’s technology and position it as a technology solution (vs. a construction solution) alongside bringing in better processes/KPIs/accountability into sales, marketing, manufacturing and capital allocation. Demand for DRT solutions is strong, evidenced by strong growth rates, particularly 59% growth in health care and 29% growth in education, with a massive growth runway given < $400M in current revenue against a $150B market. Other catalysts include a U.S. listing and potential for additional sell-side coverage given only 6 analysts currently cover the company. 

 

The Fund held a 27.7% cash weighting at month-end, down from 45.7% at the end of March. The fund has generated substantial value to investors over its long-term history, driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 365 constituents in the Canadian Equity category and 5 of a total of 111 constituents in the Canadian Small/Mid Equity category.

 

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: May 9, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

March 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

March Recap: 

 

The Fund declined 1.6% in March versus a gain of 1.0% for the S&P/TSX Composite Total Return Index ("Index”). After a broad-based market rally in February, sector performance was mixed in March with Technology (+5.0%), Utilities (+4.3%) and REITs (+3.4%) leading, and Financials (-1.4%) and Consumer Discretionary (-1.4%) lagging. 

 

Top CCVMF performers in March were Parkland Fuel (“PKI”: +10.9%) and Badger Daylighting ("BAD": +6.3%). PKI reported strong Q4 results and in-line 2019 guidance. The solid results helped ease investor uncertainty over a noisy environment that included volatility in energy prices, Alberta production curtailments and early innings of the SOL Group acquisition. BAD also had a strong Q4 report and reiterated 2019 guidance. The outlook remains strong driven by continued growth in the U.S. for infrastructure and utility projects. BAD is making solid progress on its strategic milestone of doubling the size of its U.S. business; we would not be surprised to see BAD set another 'doubling' goal once it reaches this milestone.

 

Despite this month's under-performance, we were once again encouraged to see the market return to rewarding company-specific fundamentals. Three of the Fund's four holdings that reported earnings in March (PKI, BAD and ATD.B) out-performed the market, with an average return of 7.8%. The CCVMF's strategy is built around company-specific catalysts and the best time for these to shine is around earnings. As such, we look forward to this upcoming Q1 reporting season.

 

No stocks were added to the portfolio in March. The team has been busy working through buy signals and added two new positions in April. While the buy list through Q1 reflected noise related to a macro-driven market, we are starting to see 'green shoots' that focus is returning back to company-specifics. We remain disciplined during this period and look forward to discussing purchases made subsequent to month end in next month's note.

 

The Fund held a 45.7% cash weighting at month end. The recent additions made in the Fund have lowered our cash position to approximately 35% at the time of writing. The fund has generated substantial value to investors over its long-term history, driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 365 constituents in the Canadian Equity category and 5 of a total of 111 constituents in the Canadian Small/Mid Equity category.

 

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 18, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

February 2019 | Caldwell Canadian Value Momentum Fund Commentary

Caldwell Canadian Value Momentum
       

February Recap: 

 

The Fund gained 4.6% in February versus a gain of 3.2% for the S&P/TSX Composite Total Return Index ("Index”). Broad-based market strength continued in February with every sector (excluding materials, driven by gold) posting a positive return. The Fund's strong performance was broad-based with nine out of ten holdings out-pacing the market return. 

 

Top CCVMF performers in February were North American Energy Group (“NOA”: +26.2%), Enerflex ("EFX": +15.2%), Kirkland Lake Gold ("KL": +13.8%) and Cargojet ("CJT": +10.7%). NOA's strength comes off the back of a quarter that saw revenue and EBITDA beat analyst expectations by 40% and 37%, respectively. Revenue grew 60% year-over-year, with half of that coming from organic growth, driven by higher earth-moving volumes in oil sands, improved revenue from mine support and expanded maintenance activity. Management continues to call for EPS of $1.60 in 2019, underpinned by a strong backlog that has increased over 12-fold to $1.2B. Enerflex reported record backlog and bookings, driven by several major project wins that give the company good earnings visibility through 2019 and into 2020. The company appears to be on the cusp of a multi-year period of margin expansion given the nature of the backlog. Kirkland Lake delivered strong cost performance with total cash costs of $320/oz. They also provided a strong update to their reserve and resource estimates, driven by its Fosterville mine. This drove an upward revision to the company's 3-year guidance. Cargojet reported results ahead of expectations despite Canada-Post related headwinds. The company continues to have a strong revenue pipeline given its unique positioning in the e-commerce eco-system. 

 

After the sharp and broad-based market sell off in Q4-2018, followed by the sharp and broad based current market rally, we found it refreshing to see the market return to rewarding company-specific fundamentals. Not coincidentally, the CCVMF's top four performers were also the four holdings that reported earnings in February.

 

No stocks were added to the portfolio in February.

 

The Fund held a 37.1% cash weighting at month end. The fund has generated substantial value to investors over its long-term history driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 370 constituents in the Canadian Equity category and 5 of a total of 111 constituents in the Canadian Small/Mid Equity category.

 

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: March 19, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

January 2019 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

January Recap 

 

The Fund gained 3.1% in January versus a gain of 8.7% for the S&P/TSX Composite Total Return Index ("Index”). Broad-based market weakness in Q4 turned into broad-based strength in January. Health Care, driven by weed stocks, was the best-performing sector (+43.2%). Technology, Consumer Discretionary and Energy all posted gains of 10%+. 

 

Top CCVMF performers in January were North American Energy Group (“NOA”: +13.1%) and Badger Daylighting (“BAD”: +8.4%). NOA moved higher with the broader energy space, while BAD saw management active in the NCIB in early January. There were no company-specific catalysts beyond these. 

 

Three stocks were added to the portfolio in January: Kirkland Lake Gold ("KL"), Empire Ltd. ("EMP.A") and Enerflex ("EFX").

 

Kirkland Lake was added back to the portfolio following their Investor Day which confirmed the company's strong growth profile.

 

Empire was also added back to the portfolio after a strong earnings report that saw EBITDA beat analyst expectations by over 10% on strong same-store-sales growth of 3.2%. The self-help/cost story remains a tailwind, along with inflation returning to the industry.

 

Enerflex provides equipment and services used to build the infrastructure required to support growing global demand for natural gas. The company has done well to shift its revenue mix towards higher-margin and recurring revenue. Recent bookings strength has led to a record-high backlog, which we expect will drive the share price higher. 

 

The Fund held a 38.8% cash weighting at month end. The Fund continues to generate substantial value to investors over its long-term history driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 5 of a total of 369 constituents in the Canadian Equity category and 6 of a total of 112 constituents in the Canadian Small/Mid Equity category.

 

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: February 19, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

December 2018 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

December Recap 

 

The Fund declined 4.6% in December versus a loss of 5.4% for the S&P/TSX Composite Total Return Index ("Index”). It was another month of broad-based weakness with only the gold sector posting a positive return. This is now the 7th consecutive month in which the CCVMF out-performed a declining Index. Since inception (August 2011), the fund has outperformed the Index in 27 of 34 down months for a 79% success ratio. 

 

Three stocks were added to the portfolio in December: Badger Daylighting ("BAD"), Alimentation Couche-Tard ("ATD.B") and Metro Inc. ("MRU"). Badger provides non-destructive excavating and related services in Canada and the U.S and owns the largest hydrovac excavation fleet in North America. Business momentum is strong while new segment disclosures illustrate decreased exposure to oil & gas, which should re-rate the multiple higher. BAD has a 17%, 10-year, organic revenue growth rate and management believes they have only scratched the surface on growth opportunity, given low penetration of non-destructive excavation and expansion runway into new geographies.

 

Revenue and EBITDA are at record highs while the stock still trades meaningfully below its all-time high. While MRU and ATD.B are likely benefiting from the market's shift to defensive stocks, both companies also have company-specific catalysts to drive share prices higher. Metro operates grocery and pharmacy stores across Canada. It is benefiting from a positive inflection in grocery inflation, lower-than-expected headwinds from minimum wage hikes and synergies from the Jean Coutu pharmacy acquisition. Alimentation Couche-Tard is one of the largest convenience store operators and fuel retailers in North America. ATD.B was a very successful holding for the CCVMF between October 2014 and March 2016. We are back in this company after a sideways trading consolidation period which saw the forward Enterprise Value/EBITDA multiple contract from 11.9x to 10.0x. Same store sales growth has inflected positively on the back of food and beverage initiatives while the company continues to see a healthy, multi-year acquisition pipeline.

 

Full Year 2018 Recap 

 

The Fund declined 6.0% in 2018 versus a loss of 8.9% for the Index. Despite the Fund ending the year with a loss, we are pleased to have once again significantly out-performed the Index. Over the past 5 years, the Fund holds a category-best downside capture ratio of 38.1% and ranks in the top 2% of all Canadian Equity funds for the 3-year period, and top 5% for the 5-year period, ending December 31, 2018. 

 

The Fund held a 54.7% cash weighting at the end of December. There has been strong 'risk off' sentiment to the market these last three months with investors focusing more on macro issues (trade/global growth and interest rates) over company-specific drivers. During more challenging markets, it is important to remember the fundamental reasons for owning an investment. Specific to the CCVMF, the fund has generated substantial value to investors over its long-term history, driven by the combination of strong company-specific catalysts and a concentrated portfolio. We continue to look forward to strong results as we progress through 2019 and beyond.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 5 of a total of 363 constituents in the Canadian Equity category and 6 of a total of 114 constituents in the Canadian Small/Mid Equity category.

 

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. Principal distributor: Caldwell Securities Ltd. Publication date: January 25, 2019.

 

FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

November 2018 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

November Recap 

 

The Fund declined 1.7% in November versus a gain of 1.4% for the S&P/TSX Composite Total Return Index ("Index”). The Index was driven by strength in defensive sectors, with Consumer Staples (+7.6%), Telecom (+7%) and Gold Sub-Industry (+5%) leading the way. Weakness in Energy continued (-3.0% in November; -15.4% year-to-date) while Health Care (-5.8%) was dragged down by a reduced appetite for cannabis stocks. 

 

Canopy Growth ("WEED": -6.8%), Aurora Cannabis ("ACB": -15.0%) and Aphria ("APHA": -33.1%) now account for 3 of the 5 largest companies in Canada's Health Care sector. Collectively, these 3 companies generated negative $417 million in cash from operations and spent another $916 million in capital expenditures for a cash burn of $1.3 billion over the last 12 months. At the time of writing, the market cap of these companies was $23.3 billion, down from approximately $43 billion at their peak in mid-October. This is a great example of how the CCVMF is different from pure momentum strategies; because the CCVMF combines value and momentum, these companies did not screen as buy candidates despite strong momentum going into their peaks. This strategy protected our investors from substantial losses.

 

The Top Performer in November was CGI Group ("GIB.A": +4.6%). The company reported another strong earnings result, creating a positive set-up for 2019 as client spend on IT continues. 

 

No stocks were added to the portfolio in November.

 

The Fund held a 41.1% cash weighting at month end and is over 50% cash at the time of this writing. There has been strong 'risk off' sentiment to the market these last two months with investors focusing more on macro issues (trade/global growth and interest rates) over company-specific drivers. During more challenging markets, it is important to remember the fundamental reasons for owning an investment. Specific to the CCVMF, the fund has generated substantial value to investors over its long-term history. The Fund's performance ranks in the top 1% of all Canadian equity funds over the past three years, and top decile over all annualized periods up to and including the past five years.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The Fund was not a reporting issuer offering its securities privately from August 8, 2011 until July 20, 2017, at which time it became a reporting issuer and subject to additional regulatory requirements and expenses associated therewith.

 

Unless otherwise specified, market and issuer data sourced from Capital IQ.

 

As the constituents in the Canadian Equity category largely focus on securities of a larger capitalization and CCVMF considers, and is invested, in all categories, including smaller and micro-cap securities, we have also shown how CCVMF ranks against constituents focused in the smaller cap category. The above list represents 5 of a total of 374 constituents in the Canadian Equity category and 6 of a total of 114 constituents in the Canadian Small/Mid Equity category.

 

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. Principal distributor: Caldwell Securities Ltd. Publication date: December 17, 2018.

 

FundGrade ratings are to be used for information purposes only and are not intended to provide financial, tax, accounting, legal or investment advice. You should not rely FundGrade ratings in any way. If you need information about a specific financial, tax, accounting, legal or investment issue, you should consult an appropriately-qualified professional adviser. Fundata does not make any recommendations regarding the advisability of investing in any particular security or securities generally. You agree that these ratings or any other information made available through Fundata are not a substitute for the exercise of independent judgment and expertise.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

October 2018 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

October Recap: 

 

The Fund declined 5.5% in October versus a loss of 6.3% for the S&P/TSX Composite Total Return Index ("Index”). This was the worst monthly decline for the Index since the 8.7% drop in September 2011. All sectors in the market experienced declines with Health Care (-17.7%), Energy (-9.2%) and Technology (-8.1%) faring the worst. The only place investors found shelter was in the Gold Sub-Sector (+3.7%), although there was likely some recovery off of oversold levels, as the Gold Sub-Sector remains down 19.1% year-to-date. 

 

Of the 247 stocks in the Index, only 47 (19%) posted a positive return in October. Excluding gold, this number drops to 33 or 13%. It was clearly a broad-based risk-off market and the CCVMF's holdings were not immune. What drove the CCVMF's out-performance in October was the fund's substantial cash weighting, a product of the strategy's embedded sell discipline. This led to the 6th consecutive time that the CCVMF out-performed the Index in a down month. Since inception (August 2011), the fund has outperformed the Index in 26 of 33 down months for a 79% success ratio. Year-to-date, the CCVMF ranks in the top 1% of all Funds within the Canadian Equity category.

 
TSX -number of Positive Performers in October by Sector

Top Performers in October were North American Construction Group ("NOA": +11.3%) and Parkland Fuel ("PKI": +1.8%). NOA's strong performance comes on the back of another strong earnings report where EBITDA beat analyst expectations by over 50%. We see several positive catalysts for the stock going forward and the stock remains attractively valued, trading at <9x their 2019 EPS guidance. PKI announced the acquisition of Sol Investments in October. Sol is the largest fuel distributor in the Caribbean and this move significantly expands PKI's supply footprint.

 

Three stocks were added to the portfolio in October: Element Financial ("EFN"), Aecon Group ("ARE") and Aritzia ("ATZ"). Element is the largest publicly traded fleet management company in North America. A new CEO has been appointed to execute a turnaround strategy with internal initiatives driving material earnings improvement over the next few years. Companies that have the ability to unlock value through actions that are within management's control are particularly attractive in today's market. Aecon is a leading Canadian construction company that has secured a record $7B backlog as construction markets have shifted towards the company's wheelhouse (light rail, hydro-electric power, to name a few). We expect an increasing margin profile going forward as well as a higher percentage of recurring revenue through master service agreements in utilities, telecom and contract mining. Aritzia is a fashion retailer of women's apparel and accessories that is seeing strong brand adoption, particularly in the U.S. where there is a long growth runway. The company has only 24 stores in the U.S. today, versus 66 in Canada. Aritzia is targeting a niche area of the market, providing higher quality than fast fashion, but greater affordability than the top fashion design houses. Same-store-sales grew to 11.5% last quarter with 40% revenue growth in the U.S. 

 

The Fund held a 40% cash weighting at month end. Our priority in this market is to remain disciplined in our decision-making, continuing to focus on companies that have strong catalysts to drive their share prices higher.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The information contained in this document is designed to provide general information related to investment alternatives and strategies and is not intended to be investment or any other advice applicable to the circumstances of individual investors. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Unless otherwise specified, information in this document is provided as of the date of first publication and will not be updated. All information herein is qualified in its entirety by the disclosure found in the CCVMF’s most recently filed simplified prospectus. Information contained in this document has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing in this product. Unless otherwise indicated, rates of return are the historical annual compounded total 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 security holder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The CCVMF is a publicly offered mutual fund that offers its securities pursuant to simplified prospectus dated July 20, 2017. The CCVMF was not a reporting issuer prior to that date and formerly offered its securities privately as follows: Series F and Series I since March 28, 2014 and Series O since August 8, 2011. The expenses of the CCVMF would have been higher during the period prior to becoming a reporting issuer had the fund been subject to the additional regulatory requirements applicable to a reporting issuer. Inception Date: August 8, 2011. Principal Distributor: Caldwell Securities Ltd.

 

FundGrade ratings are to be used for information purposes only and are not intended to provide financial, tax, accounting, legal or investment advice. You should not rely FundGrade ratings in any way. If you need information about a specific financial, tax, accounting, legal or investment issue, you should consult an appropriately-qualified professional adviser. Fundata does not make any recommendations regarding the advisability of investing in any particular security or securities generally. You agree that these ratings or any other information made available through Fundata are not a substitute for the exercise of independent judgment and expertise.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

September 2018 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

September Recap: 

 

The Fund gained 1.5% in September versus a loss of 0.9% for the S&P/TSX Composite Total Return Index ("Index”). The Index was driven by Consumer Discretionary (-4.6%, driven by Dollarama (“DOL”: -17.5%)) and Energy (-3.6%). Health Care (+12.1%) and Technology (+0.1%) were the only positive sectors.

 

This is the 5th consecutive time the CCVMF outperformed the Index in a down market. Since inception (August 2011), the fund has outperformed the Index in 25 of 32 down months for a 78% success ratio. The CCVMF's down capture in September was actually negative (a good thing) given the Fund posted a positive return in a negative market. The fund held 10 stocks that posted a positive return in a down month. Over the last 3 years, the CCVMF has a negative down capture (-26.9%) alongside a strong up-capture (95.9%).

 

Top CCVMF performers in September were North American Energy (“NOA”: +26.5%) and Cargojet (“CJT”: +10.6%). Note that these stocks were also top performers in August on the back of strong earnings reports. NOA has also been busy on the M&A front, expanding its services in Northern Canada through a 49% stake in Nuna Logistics. Additionally, subsequent to month end, NOA announced the acquisition of Aecon's heavy construction fleet. This is a significant acquisition with NOA stating 2019 EPS could exceed $1.60 per share (versus Street estimates of $0.99 per share at the time). While the stock has performed very strongly year-to-date, there appears to be a significant amount of upside remaining.

 

One stock was added to the portfolio in September: Parkland Fuel (“PKI”). The company is an independent fuel marketer and distributor in Canada and the U.S. and is building a scale advantage through an acquisition strategy. PKI recently raised their annual synergy target on their CCL acquisition from $80M to $180M and the runway of growth opportunities remains robust, including U.S. expansion, convenience store sales and commercial fuel growth. Subsequent to month end, PKI made another transformative acquisition, expanding into the Caribbean market and establishing a new Gulf Coast focused supply platform. The deal is expected to be immediately accretive to distributable cash flow per share by 17%.

 

The Fund held a 29.5% cash weighting at month end. Cash balances have been slow to move lower; while we have added new stocks, others have fallen out of the portfolio. We will continue to be disciplined in what we own in the portfolio and expect cash balances to move lower over time. In the meantime, we look forward to tracking the progress of the portfolio’s current holdings as we see a meaningful and diverse set of catalysts to drive continued growth.

 

We thank you for your continued support. 

 

The CCVMF Team

CCVMF - Caldwell Canadian Value Momentum vs Canadian Small/Mid Cap Equity vs Canadian Equity

The information contained in this document is designed to provide general information related to investment alternatives and strategies and is not intended to be investment or any other advice applicable to the circumstances of individual investors. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Unless otherwise specified, information in this document is provided as of the date of first publication and will not be updated. All information herein is qualified in its entirety by the disclosure found in the CCVMF’s most recently filed simplified prospectus. Information contained in this document has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing in this product. Unless otherwise indicated, rates of return are the historical annual compounded total 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 security holder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The CCVMF is a publicly offered mutual fund that offers its securities pursuant to simplified prospectus dated July 20, 2017. The CCVMF was not a reporting issuer prior to that date and formerly offered its securities privately as follows: Series F and Series I since March 28, 2014 and Series O since August 8, 2011. The expenses of the CCVMF would have been higher during the period prior to becoming a reporting issuer had the fund been subject to the additional regulatory requirements applicable to a reporting issuer. Inception Date: August 8, 2011. Principal Distributor: Caldwell Securities Ltd.

 

FundGrade ratings are to be used for information purposes only and are not intended to provide financial, tax, accounting, legal or investment advice. You should not rely FundGrade ratings in any way. If you need information about a specific financial, tax, accounting, legal or investment issue, you should consult an appropriately-qualified professional adviser. Fundata does not make any recommendations regarding the advisability of investing in any particular security or securities generally. You agree that these ratings or any other information made available through Fundata are not a substitute for the exercise of independent judgment and expertise.

 
*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")

 

August 2018 | Caldwell Canadian Value Momentum Fund Commentary

< Back

 

Update on the Caldwell Canadian Value Momentum Fund

QUICK NEWS: We now have the CCVMF in a low-load option: CWF711. Please contact Jennifer Kuta or Alex Osborne for details.

 

August Recap: 

 

The Fund gained 1.65% in August versus a loss of 0.82% for the S&P/TSX Composite Total Return Index ("Index”). The Index was driven by Energy (-4.0%) and continued weakness in the so called 'safe' dividend-paying stocks found in the Consumer Staples (-1.7%), Utilities (-1.3%) and Telecom (-0.9%) sectors. The gold sub-industry also took a big hit, down 13.0% in August.

 

This is the 4th consecutive time the CCVMF out-performed the Index in a down market. Since inception (Aug 2011), the fund has outperformed the Index in 24 of 31 down months for a 77% success ratio. The CCVMF's down capture in August was actually negative (a good thing) given the Fund posted a positive return in a negative market.

 

The CCVMF has achieved peer-leading performance versus the Index since its inception. As we have previously stated, the keys to that success are owning a concentrated portfolio of companies that have strong catalysts driving their share prices higher. August was a great example of that model at work. The portfolio's strength was broad-based with 10 stocks posting a positive return in a down market. Six of these stocks gained over 10%, driven by company-specific catalysts (NOA, CJT, ATA, DOO, TFII, AFN).

 

Top CCVMF performers in August were North American Energy (“NOA”: +16.2%) and Cargojet (“CJT”: +15.0%). NOA reported a big earnings beat and raised annual guidance well above the market's expectations. The strong results are being driven by multiple catalysts which led to a backlog that grew to $328 million from $83 million in the prior quarter. Cargojet also reported results that beat expectations. The company continues to have several growth drivers in place to increase revenue, driven by the growth in cargo services, including e-Commerce tailwinds.

 

One stock was added to the portfolio in August: Toromont Industries (“TIH”). The company operates one of the largest and most successful Caterpillar dealerships in Canada. It is a well-managed company with a long track record of strong earnings growth and peer-leading return on capital. TIH is well positioned for growth driven by their recent acquisition of Hewitt Equipment, the authorized Caterpillar dealer for Quebec and West Labrador. The deal brings significant opportunities to take TIH's successful playbook to new markets while increased infrastructure spending should continue to drive demand over the next several years.

 

The Fund held a 30.5% cash weighting at month end and 23.8% at the time of writing. Cash balances have been slow to move lower; while we have added new stocks, others have fallen out of the portfolio. We will continue to be disciplined in what we own in the portfolio and expect cash balances to move lower over time. In the meantime, we look forward to tracking the progress of the portfolio’s current holdings as we see a meaningful and diverse set of catalysts to drive continued growth.

 

We thank you for your continued support. 

 

The CCVMF Team

The information contained in this document is designed to provide general information related to investment alternatives and strategies and is not intended to be investment or any other advice applicable to the circumstances of individual investors. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Unless otherwise specified, information in this document is provided as of the date of first publication and will not be updated. All information herein is qualified in its entirety by the disclosure found in the CCVMF’s most recently filed simplified prospectus. Information contained in this document has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing in this product. Unless otherwise indicated, rates of return are the historical annual compounded total 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 security holder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The CCVMF is a publicly offered mutual fund that offers its securities pursuant to simplified prospectus dated July 20, 2017. The CCVMF was not a reporting issuer prior to that date and formerly offered its securities privately as follows: Series F and Series I since March 28, 2014 and Series O since August 8, 2011. The expenses of the CCVMF would have been higher during the period prior to becoming a reporting issuer had the fund been subject to the additional regulatory requirements applicable to a reporting issuer. Inception Date: August 8, 2011. Principal Distributor: Caldwell Securities Ltd.

 

*  Categories defined by Canadian Investment Funds Standards Committee ("CIFSC")