December and Full-Year 2022 | Caldwell Canadian Value Momentum Fund Commentary

December 2022 Recap
The Caldwell Canadian Value Momentum Fund (“CVM” or “Fund”) declined -3.7% in December versus a decline of -4.9% for the S&P/TSX Composite Total Return Index (“Index”). At the sector level, Materials, Consumer Staples, and Real Estate were relative outperformers, whereas Health Care, Information Technology, and Industrials underperformed.

From an attribution standpoint, December was a challenging month where every sector in the Index declined. In addition to benefitting from cash holdings, the Fund’s performance was aided by Shawcor (“SCL”, +10.1%), Teck Resources (“TECK.B”, +2.9%), and Descartes Systems (“DSG”, +1.1%). SCL’s cost-cutting and portfolio optimization measures continue to support a positive re-rating of the stock, which recorded its second consecutive month as a top performer in the Fund. TECK.B and DSG held their ground in a declining market as our theses for both companies remained intact.

During December, the Fund initiated positions in Ag Growth International (“AFN”) and Finning International (“FTT”). AFN provides solutions for global food infrastructure – facilitating the storage, movement, processing, and protection of crops and agricultural inputs. The company is positioned to benefit from the favourable environment for global agriculture fundamentals, paired with a strong backlog and sales momentum across different regions. FTT is the world’s largest dealer of Caterpillar heavy equipment and complementary products. It sells, rents, and services equipment and engines for various industries with operations in Canada, South America, and the U.K. Elevated commodity prices and an improved infrastructure spending outlook should underpin robust demand allowing earnings to remain above historical levels going forward.

The Fund held a 15.9% cash weighting at month-end. The 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 2023 and beyond.

Full-Year 2022 Recap

The Fund declined -7.9% in 2022 versus a decline of -5.8% for the Index. It was a challenging year for the market as Energy and Consumer Staples were the only sectors in the Index that generated materially positive returns. The market had a tough act to follow in 2022 after the stellar returns generated by the Index in 2021. The year 2021 ended strongly with the post-COVID economic recovery gaining momentum and supply chain issues easing, which had led the market to all-time highs. However, after an eventful and volatile year, investors were ultimately left disappointed as 2022 ended with negative returns. The decline in the market was underpinned by macroeconomic uncertainty, geopolitical instability, and the Bank of Canada taking a sharp hawkish stance following over a decade of dovishness in a resolute move to cool persistently high inflation. These factors coupled together rationalize the increased volatility and the underlying weakness experienced in the market throughout the year.

Energy was by far the strongest-performing sector in 2022 as a result of elevated energy prices, which were a direct consequence of the energy crisis inflicted by Russia’s invasion of Ukraine. Health Care was the worst-performing sector, however, it has a small weighting of less than 1% in the Index. Information Technology followed, which tends to comprise more richly-valued stocks, as it underwent a massive correction of over -50%. Real Estate was the third worst performer as the rising interest rate environment deemed the yields offered by income-producing assets to be less attractive.

Standard performance as at December 31, 2022:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: -7.9%, 3 year: 8.4%, 5 year: 6.9%, Since Inception (August 29, 2014): 7.7%.
S&P/TSX Composite Total Return Index: 1 Year: -5.8%, 3 year: 7.5%, 5 year: 6.8%, Since Inception (August 29, 2014): 5.8%.
Actual Investments, first purchased: SCL 9/12/2022, TECK.B 5/9/2022, DSG 11/11/2022.
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.
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.

Publication date: January 16, 2022.