April 2024 | Caldwell Canadian Value Momentum Fund Commentary

April Recap:

For the month of April, the Caldwell Canadian Value Momentum Fund (“CVM” or “Fund”) declined -3.4% versus a decline of -1.8% for the S&P/TSX Composite Total Return Index (“Index”). From a sector standpoint, Materials, Energy, and Consumer Staples were relative outperformers, whereas, Real Estate, Industrials, and Information Technology underperformed.

Top performers in the month of April were Agnico Eagle Mines (“AEM”), goeasy (“GSY”), and Cameco (“CCO”). AEM performed well as the company exceeded its quarterly earnings expectations, which was driven by achieving increased production volumes while still maintaining the unit costs in line with expectations. GSY rerated higher as the company continued to experience a favourable competitive environment across the credit spectrum with a record volume of applications, as banks have tightened their credit and the non-prime lenders have also been pulling back. CCO continues to perform well driven by a robust demand backdrop as the demand for nuclear power generation has been increasing and supply security has become ever more relevant for utilities as well as governments around the world, given the current geopolitical landscape.

During the month of April, the Fund initiated positions in Headwater Exploration (“HWX”), Crescent Point Energy (“CPG”), Agnico Eagle Mines (“AEM”), Eldorado Gold (“ELD”), and Lundin Mining (“LUN”).
HWX focuses on the exploration, development, and production of petroleum and natural gas in Canada. The company is carrying out meaningful exploration, which has been showing an attractive potential for Net Asset Value as well as inventory expansion going forward.

CPG is predominantly a producer of crude oil with its core properties in Saskatchewan, Kaybob Duvernay, and Alberta Montney. The company has successfully transitioned to a high-quality producer with sufficient quality inventory to enable over 20 years of robust organic volume growth, which should translate to attractive free cash flow per share growth.

AEM is a Canadian gold producer operating two of the largest gold mines in Canada with assets located in Canada, Australia, Mexico, and Finland, which are jurisdictions that are safe politically. The company is poised to benefit from attractive production growth and deliver an improving free cash flow profile, which should lead to a strengthening balance sheet as well as potentially enable dividend increases.
ELD is a Canadian intermediate gold producer with mines in Canada, Türkiye, and Greece. The company’s valuation has been trailing the rising bullion price, providing the stock with greater potential for rerating higher through multiple expansion.

LUN is a producer of copper, zinc, and nickel with its mining operations located in Chile, Brazil, U.S., Sweden, and Portugal. In addition to possessing a strong balance sheet and a favourable geographic footprint, the company is poised to benefit from China’s production cuts as well as production shutdowns in Panama and Zambia, which are pressurizing the global supply of copper.

The Fund held a 3.1% cash weighting at month-end. While we remain mindful of the macro environment, the Fund employs a bottom-up investment approach designed to seek out attractive investment opportunities in any market. CVM has generated substantial value for 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 2024 and beyond.

Standard performance as at April 30, 2024:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: 7.6%, 3 year: 5.2%, 5 year: 8.7%, Since Inception (August 29, 2014): 7.8%.
S&P/TSX Composite Total Return Index: 1 Year: 8.7%, 3 year: 7.6%, 5 year: 8.9%, Since Inception (August 29, 2014): 6.7%.
Actual Investments, first purchased: AEM 4/1/2024, GSY 12/7/2023, CCO 5/31/2023.

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 & Morningstar Direct.

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 16, 2024.

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