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")

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