April 2018 | Caldwell Canadian Value Momentum Fund Commentary

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April Recap:

The Fund was flat in April versus a gain of 1.8% for the S&P/TSX Composite Total Return Index ("Index”). The Index's performance was driven by Energy (+6.8%) while yield-sensitive sectors continued to feel the pressure of rising interest rates: Utilities (-1.8%), Consumer Staples (-1.4%) and REITs (-0.4%).

Top CCVMF performers in April were WSP Global (WSP: +7.1%) and North American Construction Group (NOA: +7.1%). While there was no specific news related to WSP, the company is coming off a solid earnings report in March and Ontario and Quebec budgets released at the end of March suggest that infrastructure spending is still a focus for governments. There is also chatter that WSP is in a position to possibly do a larger, transformational type of acquisition as it continues to consolidate the industry. NOA's positive momentum continues as its guidance for 15% CAGR in revenue and ebitda for 2018 and 2019 is starting to look conservative. The company is benefiting from a successful renewal of oil sands long term service agreements and Suncor's Fort Hills mine is providing incremental demand. NOA also has good line of sight into heavy construction projects for the summer of 2018 after a 4 year drought and commodity price strength is providing additional opportunities.

One stock was added to the portfolio in April: Methanex (MX). Methanex is the largest producer of methanol in the world, accounting for ~15% of global capacity. Methanol is a chemical used to manufacture many consumer and industrial products and is also a clean-burning alternative fuel source. The company is benefiting from very strong methanol pricing and, while there are many moving parts, it seems that supply/demand fundamentals will remain favorable through the end of the year. Demand is being driven by new consumption from methanol-to-olefins (MTO) plants in China and longer term demand drivers from marine fuel, industrial boilers and fuel-blending show significant potential. Analysts have modeled methanol prices to retreat from recent highs so any sustained tightness would be positive. The company is aggressively buying back shares with excess cash flow as capital spending remains minimal for the next 18 months.

The Fund held a 31.4% cash weighting at month end. As previously discussed, we expect cash balances to move lower as we progress through the CCVMF's investment process. In the meantime, we look forward to tracking the progress of the portfolio’s 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.

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