January 2022 | Caldwell Canadian Value Momentum Fund Commentary

January Recap: The Caldwell Canadian Value Momentum Fund (“CVM”) gained +0.3% in January versus a decline of -0.4% for the S&P/TSX Composite Total Return Index (“Index”)1. Sector returns within the Index continued to have a wide range of outcomes. Information Technology (-20.4%), Healthcare (-9.1%) and Real Estate (-5.7%) were the worst performing sectors. Energy (+12.5%), Financials (+4.0%) and Communication Services (+1.6%) were top performers and the only sectors with positive returns for the month.

Top performers in the Fund were NuVista ("NVA" +29.2%), Headwater Exploration ("HWX" +37.9%) and Tourmaline Oil ("TOU" +14.0%)2.

All three companies benefited from continued momentum in energy prices which reached levels not seen since 2014. NVA released an operational update with better than expected production volumes while strong financial performance and a positive outlook led TOU to increase its regular dividend and announce a one-time special dividend.

Three stocks were added to the portfolio in January: Aritzia ("ATZ"), Trisura Group ("TSU") and Cenovus Energy ("CVE"). ATZ is a leading omnichannel retailer of women’s apparel in North America. A strong social media presence, large SKU count and compelling price point resonate well with its core customer base. Improving brand awareness in the U.S. supports an expansion strategy that aims to grow the footprint from 40 to 100 stores over the next few years. Lastly, throughout the pandemic, operating leverage has been driven entirely by robust sales growth. We believe the company can and will use pricing if necessary to protect its margins, a lever most of its peers have already pulled. TSU is a leading specialty insurance provider.

The company is seeing both market and company-specific tailwinds to the business, including strong pricing and a long growth runway in its U.S. business. CVE is an integrated oil producer benefiting from newly realized cost synergies which should help drive continued operational performance. The company has made significant headway reducing its net debt and is tracking to its stated $8.0B target by end of 2022. This puts the company in an enviable position to accelerate cash returns to shareholders while funding growth projects with cash from operations.

The Fund held a 23% 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 2022 and beyond.

1See Performance Comparison table (or page 2 of the PDF) for standard performance data.

2Actual Investments, first purchased: HWX 12/07/2021, NVA 3/10/2021, TOU 6/11/2021.

3Return since August 15, 2011 (Perf. Start Date): CVM (Series A) 11.3%, Index 8.2%. | Returns are annualized for periods greater than one year.

4Categories defined by Canadian Investment Funds Standards Committee (“CIFSC”).

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.

As the constituents in the CIFSC 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 403 constituents in the CIFSC Canadian 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.

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: February 14, 2021.

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