Canadian Value Momentum Fund Reports

February 2020 | Caldwell Canadian Value Momentum Fund Commentary

The global capital market reaction to the evolving developments surrounding the COVID-19 virus and its potential ensuing disruptions to global economic supply chains has been considerable.  Canada’s market has not been immune to these events. However, the out-performance of the Caldwell Canadian Value Momentum Fund (“CVM” or “the Fund”) during this recent market correction has been very encouraging as CVM's strategy has been working exactly as we anticipated and as we have communicated it would have to our investors over the last several years. The Fund's down capture ratio from Monday, March 2nd to Thursday, March 12th was only 54.5%, meaning that CVM participated in roughly half of the market's decline during this period.  In addition, the turnover of the Fund's portfolio to-date has been approximately $30 Million or 60%, as we have been actively adjusting the portfolio by selling weakness and rotating into strength. Our investment process is designed to marry the discipline of a quantitative model with the insight and expertise of a dedicated asset manager.  We believe this investment process has enabled us to navigate this market well. While we expect continued volatility moving forward, the Fund has demonstrated significant Alpha generation since its inception in August 2011. We thank our supporters for placing their confidence in us and for providing us with an opportunity to safeguard their investments during this volatile period.

February 2020 Recap:

The Fund declined 5.7% in February versus a loss of 5.9% for the S&P/TSX Composite Total Return Index (“Index”). We usually write about what worked and what didn't but the market's risk-off nature was broad-based with every business sector trading lower. Even gold, which has historically acted as a safe haven, traded down with the broader market, and on some days, led the market lower.

While COVID-19 is capturing headlines, the indiscriminate selling suggests something bigger, with drastic measures and business disruption re-awakening liquidity concerns. A just-in-time, leveraged, economy with limited spare capacity in some critical areas is not suited to prolonged disruptions. Additionally, the market has mostly benefited from a positive ETF-driven feedback loop: it’s possible that we are starting to see what a negative feedback loop looks like.

As bottom-up investors who focus on company-specific catalysts, there are many examples of stock moves that simply don't make sense. However, it is impossible to know the path of markets and how long this macro-driven, disrupted market will last. As such, we believe an actively managed portfolio such as the CVM is best positioned to help investors navigate these markets.

Two stocks were added to the portfolio in February: B2Gold (“BTO”) and Stantec (“STN”).

BTO has several positive company-specific characteristics but the stock will ultimately trade on sentiment and fund flows.

Stantec is back to being a pure-engineering firm after a failed attempt at adding a construction capability. This is positive news as financial results have started to reflect the more attractive consistency of the engineering business model. While government infrastructure budgets are already increasing, the current state of markets despite years of monetary stimulus suggests that governments will increasingly need to tap fiscal measures to once again stimulate the economy.

The Fund held a 22.2% cash weighting at month-end. The CVM 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 2020 and beyond.

We thank you for your continued support.

The CVM Team

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

Return since August 15, 2011 (Performance Start Date): 9.1%. | Returns are annualized for periods greater than one year. | Source: Morningstar

The CVM 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 CVM ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 379 constituents in the Canadian Equity category and 5 of a total of 102 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 13, 2020.

The Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Leader ratings change monthly. Lipper Fund Awards from Refinitiv, ©2019 Refinitiv. All rights reserved. Used under license. The Caldwell Canadian Value Momentum Fund Series A in the Canadian Equity Category for the 5-year period (out of a total of 69 funds) ending July 31, 2019. Lipper Leader ratings: 5 (3 years) and 5 (5 years).

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 2020 | Caldwell Canadian Value Momentum Fund Commentary

January 2020 Recap:

There was wide dispersion across sector performance in January, with Technology (+9.4%) and Utilities (+7.6%) posting very strong returns while most sectors posted losses: Health Care (-2.6%), Consumer Discretionary (-2.5%), Energy (-2.4%) and Materials (-2.4%, despite Gold (+4.1%)). Wide dispersion was also evident looking within sectors. Given this backdrop of concentrated sector returns, the Caldwell Canadian Value Momentum Fund (“CVM”/”Fund”) gained 0.4% over the month versus a gain of 1.7% for the S&P/TSX Composite Total Return Index (“Index”).

Top CVM performers in January were Element Fleet Financial (“EFN”: +14.6%) and Cargojet (“CJT”: +14.1%).

While there was no news from EFN in January, investors seem to be getting more comfortable with the company's growth runway and turnaround plan.

CJT also had no announcements but likely benefited from news of strong e-commerce sales through the holiday season.

Three stocks were added to the portfolio in January: Altus Group (“AIF”), Parex Resources (“PXT”), and Bausch Health (“BHC”).

Altus Group provides software, data solutions and advisory services to the Commercial Real Estate (“CRE”) industry. In addition to its pivot to a cloud offering and subscription-based model, which carry significantly higher lifetime economics, the company is benefiting from a secular growth runway driven by the institutionalization of real estate as an invest-able asset class. It is also seeing strong momentum in its Property Tax business.

Parex is an oil producer operating in Colombia. The company has generated significantly higher economics than its Canadian Energy peers and with strong free cash flow, is on track to repurchase 10% of its shares outstanding for the second consecutive year. The company is also exploring asset acquisitions outside of Latin America in addition to further resource development within Colombia.

BHC was purchased for its turnaround and deleveraging story but the position has since been exited on an underwhelming earnings report.

The Fund held a 10.2% cash weighting at month-end. The CVM 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 2020 and beyond.

We thank you for your continued support.

The CVM Team

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

Return since August 15, 2011 (Performance Start Date): 9.9%. | Returns are annualized for periods greater than one year. | Source: Morningstar

The CVM 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 CVM ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 379 constituents in the Canadian Equity category and 5 of a total of 101 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 21, 2020.

The Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Leader ratings change monthly. Lipper Fund Awards from Refinitiv, ©2019 Refinitiv. All rights reserved. Used under license. The Caldwell Canadian Value Momentum Fund Series A in the Canadian Equity Category for the 5-year period (out of a total of 69 funds) ending July 31, 2019. Lipper Leader ratings: 5 (3 years) and 5 (5 years).

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 2019 | Caldwell Canadian Value Momentum Fund Commentary

December 2019 Recap:

The Caldwell Canadian Value Momentum Fund (We’ve rebranded! Our acronym has been shortened to “CVM”), declined 1.7% in December versus a gain of 0.5% for the S&P/TSX Composite Total Return Index (“Index”). While the Index posted a positive return, six of its eleven sectors were actually down for the month. Energy (+5.7%), Materials (+4.6%, led by gold stocks) and Technology (+3.2%, led by Shopify (+18.1%)) were the Index's top performers, while Consumer Staples (-5.2%) and Consumer Discretionary (-3.6%) were the worst performers.

Top CVM performers in December were Wesdome Gold (“WDO”: +16.5%) and North American Construction (“NOA”: +9.0%). WDO responded to positive drilling results and overall positive sentiment on gold names, while NOA responded to strength in the Energy sector with the price of crude oil +10.7% in December.

The CVM's performance was dragged down by holdings in the Canadian grocers, Empire (-14.4%) and Metro (-7.9%), after Empire reported an operational miss and cited increasing competition. 

One stock was added to the portfolio in December: Equitable Bank (“EQB”). The company calls itself "Canada's Challenger Bank" and is currently the country's 9th largest independent Schedule I Bank. It has a strong history of ROE generation and prudent lending and is seeing attractive growth in customers and assets. EQB is also diversifying its funding sources and product categories, which are driven by its digital platform capabilities. The company is targeting a $4/share dividend by 2024 (vs $1.40/share today), which works out to a 20-25% dividend growth CAGR. 

Full Year 2019 Recap:

The CVM gained 15.1% in 2019 versus a gain of 22.9% for the Index. While the CVM's absolute return was its 2nd highest annual return over the last six years, the CVM struggled to keep pace with the very strong Index return. Looking at the performance attribution, a few things stick out: i) The CVM lost 560 bps relative to the Index in January 2019, when the Fund entered the new year with over 50% in cash. While the CVM's sell discipline added considerable value by significantly insulating the portfolio from the sizeable market decline in Q4-18, the Index's V-shaped pattern (sharp decline at the end of 2018 followed by a sharp recovery in Q1-19), was tough on the strategy. ii) The big 6 banks and the utilities sector added 320 bps and 150 bps to the Index return, respectively. Banks and utilities typically don't screen well in the CVM model. iii) Shopify alone added 160 bps to the Index return. The stock was the 3rd strongest performer on the TSX, gaining 174% in 2019. While Shopify is showing strong growth and momentum and has an exciting story, the lack of earnings, and hence a valuation anchored on revenue, has kept us on the sidelines. The Canadian market has a history of seeing stocks show incredible gains to become among the largest companies in the market, only for investors to subsequently see them fall from grace. Shopify is currently the Index's 12th largest company by market cap. It has revenue of $1.4B relative to its $50B market cap. As a reference, the average revenue of the Index's top 20 companies by market cap (excluding Shopify), is $31.3B.

The CVM held a 9.7% cash weighting at year-end. The CVM 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 2020 and beyond.

We thank you for your continued support.

The CVM Team

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

Return since August 15, 2011 (Performance Start Date): 10.0%. | Returns are annualized for periods greater than one year. | Source: Morningstar

The CVM 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 CVM ranks against constituents focused in the smaller cap category. The above list represents 6 of a total of 377 constituents in the Canadian Equity category and 5 of a total of 105 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: January 14, 2020.

The Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Leader ratings change monthly. Lipper Fund Awards from Refinitiv, ©2019 Refinitiv. All rights reserved. Used under license. The Caldwell Canadian Value Momentum Fund Series A in the Canadian Equity Category for the 5-year period (out of a total of 69 funds) ending July 31, 2019. Lipper Leader ratings: 5 (3 years) and 5 (5 years).

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 2019 | Caldwell Canadian Value Momentum Fund Commentary

November Recap:

The Fund gained 2.7% in November versus a gain of 3.6% for the S&P/TSX Composite Total Return Index (“Index”). The Index saw broad-based strength with 9 of the 11 sectors in positive territory, which more than offset weakness in cannabis, gold, and forest product names.

Top CCVMF performers in November were Real Matters (“REAL”: +23.0%), Goeasy (“GSY”: +16.0%), and Alimentation Couche-Tard (“ATD.B”: +10.0%).

REAL moved meaningfully higher after a monster quarter in which revenue and EBITDA beat analyst expectations by 25% and 42%, respectively. The results put on display the power of the earnings model as strong mortgage activity drove revenue through the platform. Share gains validate the strength of REAL's platforms, prompting analyst upgrades as growth runway is significant.

Analysts looked past an earnings miss for GSY as credit performance and loan growth were in line to ahead of expectations. GSY is the dominant player in the non-prime Canadian lending market, where demand is strong but competition is not as intense. A debt refinancing following the earnings release was viewed positively as it further lowers GSY's cost of funding, which is a key competitive barrier.

ATD.B rallied into its earnings report on the expectation of stronger U.S. fuel margins. While same-store-sale performance was very good and initiatives are progressing well, the major news was ATD.B's bid to acquire Caltex, a leading Australian convenience and fuel retailer. Acquisitions are a key part of ATD.B's DNA and the company has done well to grow shareholder value through its acquisition strategy. The offer is currently being reviewed by Caltex's Board, but if successful, would serve as a springboard to expand the company's presence in Asia Pacific. In addition to the U.S., ATD.B sees the region as a key growth area, given its expected contribution to global growth over the next decade plus.

No stocks were added to the portfolio in November.

The Fund held a 19.7% 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

Return since August 15, 2011 (Performance Start Date): 10.3%. | Returns are annualized for periods greater than one year. | Source: Morningstar

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 376 constituents in the Canadian Equity category and 5 of a total of 106 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: December 17, 2019.

The Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Leader ratings change monthly. Lipper Fund Awards from Refinitiv, ©2019 Refinitiv. All rights reserved. Used under license. The Caldwell Canadian Value Momentum Fund Series A in the Canadian Equity Category for the 5-year period (out of a total of 69 funds) ending July 31, 2019. Lipper Leader ratings: 5 (3 years) and 5 (5 years).

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")

October 2019 | Caldwell Canadian Value Momentum Fund Commentary

October Recap:

The Caldwell Canadian Value Momentum Fund (“Fund” or “CCVMF”) gained 0.8% in October versus a loss of 0.9% for the S&P/TSX Composite Total Return Index (“Index”). The Index continued to see dispersion of performance with gains in Gold (+4.5%) and Industrials (+0.8%), offset by weakness in Consumer Staples (-4.6%), Health Care (-4.6%), Consumer Discretionary (-4.3%), and Energy (-4.3%). The Fund's strong performance was broad-based with 70% of holdings beating the Index return and over 80% beating their respective Sector returns.

Top CCVMF performers in October were Air Canada ("AC": +8.5%) and Element Fleet ("EFN": +5.7%).

Air Canada posted a solid earnings result despite continued disruption from the grounding of the Boeing 737 Max, which demonstrates the improved resiliency of AC’s business model. The company has further room to improve margins over the next few years - as laid out in its analyst day earlier this year - while a healthy demand environment and other self-help factors drive further growth runway.

Element Fleet continues to execute on its turnaround strategy with shares continuing to move higher after another strong earnings report in early November. The company is ahead of plan on its initial cost targets and is entering the growth phase of the plan. Price targets have moved higher across the board.

Two stocks were added to the portfolio in October: Wesdome Gold (“WDO”) and Major Drilling (“MDI”). As a reminder, for commodity-driven names, we are looking for company-specific catalysts that allow share prices to move higher outside of a higher commodity price. WDO has seen strong operational and drilling results, and we like the fact that its properties are 100% in Canada. While MDI is more sensitive to the underlying gold price, we expect senior gold producers' budgets to start showing growth after years of restrained spending, which is supported by healthy free cash flow generation this year.

In addition, the process is well underway to source a new addition to the Fund’s portfolio management group to complement the efforts of William Chin, Portfolio Manager and Chief Technical Analyst, and myself. The new addition will replace Mario Mainelli who, having been a valued member of the Caldwell team for the past five years, has moved on to pursue other opportunities. We wish Mario great success in his future endeavours.

The Fund held a 16.0% 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 374 constituents in the Canadian Equity category and 5 of a total of 108 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: November 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")

September 2019 | Caldwell Canadian Value Momentum Fund Commentary

September Recap:

The Fund declined 1.4% in September versus a gain of 1.7% for the S&P/TSX Composite Total Return Index (“Index”).

The Index saw widespread dispersion of performance with Financials (+6.4%) and Energy (+5.0%) posting strong gains while Materials (-7.5%), Health Care (-7.4%), and Technology (-7.1%) saw substantial declines.

Much of the movements were macro-driven, with Financials responding to a sharp reversal in interest rates, while investors revisited the beaten-down Energy sector following a drone strike on Saudi oil production. Meanwhile, Industrials (-2.4%) moved lower with weak global industrial production data and continued trade uncertainty, while Gold (-10.6%) led the Materials sector lower.

Top CCVMF performers in September were GoEasy (“GSY”: +10.7%) and Metro (“MRU”: +3.3%).

GSY entered into a strategic partnership agreement that will expand its distribution into point-of-sale consumer financing.

We saw no news on Metro.

The Fund was led lower by Kirkland Lake (“KL”: -8.3%) and Cargojet (“CJT”: -8.6%), both of which were top performers in August. We look forward to this upcoming earnings season as a catalyst for investors to re-focus on company-specific fundamentals. 

No stocks were added to the portfolio in September. 

The Fund held a 20.8% 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 368 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: October 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")