April 2020 | Caldwell Canadian Value Momentum Fund Commentary

April 2020 Recap:

The Caldwell Canadian Value Momentum Fund (“CVM”) out-performed the S&P/TSX Composite Total Return Index (“Index”) by nearly 160 basis points, with a gain of 12.4% in April versus a gain of 10.8% for the Index, as the market sharply snapped back following the COVID-19-driven sell off. The Index saw a very wide range of sector performance, with Materials gaining 33.0% on a 39.1% return for the Gold sub-sector, while Communications Services (-0.3%) and Financials (+0.9%) were essentially flat for the month.

April’s strong performance figures come on the heels of the record setting volatility seen in March. Over the Fund’s tenure, CVM has shown a history of success in both up and down markets. The past two months were no exception. The Fund’s overall risk profile proved especially beneficial during the sizeable drawdowns seen in March. On the flipside, the strong company-specific catalysts embedded within the Fund’s current holdings helped drive performance to the upside over April. CVM’s upside capture ratio relative to the TSX through April was 114%.

Top CVM performers in April were B2Gold (“BTO”: +65.3%), Wesdome Gold (“WDO”: +44.2%) and Cargojet (“CJT”: +39.0%) with both gold names out-performing the broader Gold sub-sector. Cargojet is seeing stronger demand, along with stronger pricing, as a result of the COVID-19 pandemic as cargo capacity has been significantly reduced with the steep decline in passenger flights. The company is also benefiting from the accelerating shift to e-commerce and new charter flights serving the Canadian federal and provincial governments sourcing personal protective equipment from overseas.

Seven stocks were added to the portfolio in April: Quebecor (“QBR.B”), Loblaw (“L”), Northland Power (“NPI”), Kinaxis (“KXS”), Innergex (“INE”), Enghouse (“ENGH”), and Emera (“EMA”). All companies have earnings streams that are relatively resilient to the COVID-19 environment.

QBR.B is a telecom and media company with a French content offering which should benefit from stay-in-place orders and higher broadband demand.

L operates grocery stores and pharmacies, which are seeing strong demand with consumer stock-piling and grocery taking share from restaurants.

NPI, INE and EMA are all power producers with a high percentage of contracted revenues with strong counter-parties.

ENGH and KXS are software providers with a high percentage of recurring revenue and products that are mission-critical to their enterprise customers. Kinaxis, specifically, is seeing incremental demand for its supply chain planning software given COVID-19 disruptions to global supply chains. The company was already seeing strong demand pre-COVID-19 with companies rethinking their supply chains on escalating trade tensions.

The Fund held a 13.0% cash weighting at month-end and 11.2% at the time of writing.

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

Return since August 15, 2011 (Performance Start Date): 8.2%. | 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 CVM 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 362 constituents in the Canadian Equity category and 5 of a total of 100 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 11, 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")