Month End Recap:
For the month of January, the Caldwell Canadian Value Momentum Fund (CVM or Fund) gained 3.4% versus a gain of 3.5% for the S&P/TSX Composite Total Return Index (Index). From a sector standpoint, Materials, Information Technology, and Industrials were relative outperformers, whereas Healthcare, Consumer Staples, and Utilities underperformed.
Top performers in the month of January were Aritzia (ATZ), Kinross Gold (K), and Celestica (CLS). ATZ rerated higher as the company exceeded its earnings expectations significantly, driven by increasing comparable sales across all channels as well as geographies. Additionally, the particular strength in the U.S., as demonstrated by accelerating sales trends month over month, provided further reassurance that the company is successfully capitalising on its significant U.S. growth opportunity. K rerated higher as a result of a constructive move in the price of gold, which provides the company with a favourable backdrop to continue generating strong free cash flows supporting the company to continue deleveraging its balance sheet. CLS delivered robust quarterly results and raised its guidance for 2025, driven by strong demand from hyperscalers, as they continue to deploy large investments for high performance compute capacity.
During the month of January, the Fund initiated positions in CGI Inc. (GIB.A) and CAE Inc. (CAE).
GIB.A is a leading global Information Technology (IT) and business consulting services firm, providing a comprehensive range of services, including IT outsourcing, systems integration, application development, and business consulting. With over 90,000 employees worldwide, the company delivers digital transformation, cloud management, and managed IT services to clients across government, financial services, healthcare, manufacturing, and other key industries. The company is experiencing positive momentum in their revenue as well as booking, supported by their effective mergers and acquisitions activity.
CAE is a global leader in simulation and training solutions for the civil aviation and defence markets, specializing in the design and production of flight simulation systems for commercial and military applications. With the largest installed base of full-flight simulators and training devices worldwide, the company also provides comprehensive training services to enhance pilot proficiency and mission readiness. The recovery in aircraft deliveries should drive increased demand for civil aviation training, while an improving defence contract mix is expected to enhance margins as low-margin legacy contracts are phased out.
The Fund held a 0.5% 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 2025 and beyond.
Standard performance as at January 31, 2025:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: 19.4%, 3 year: 6.0%, 5 year: 10.5%, 10 year: 10.3%, Since Inception (August 29, 2014): 8.8%.
S&P/TSX Composite Total Return Index: 1 Year: 25.2%, 3 year: 10.0%, 5 year: 11.5%, 10 Year: 9.0%, Since Inception (August 29, 2014): 8.1%.
Actual Investments, first purchased: ATZ 10/6/2022, K 9/13/2024, CLS 1/19/2024.
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: February 25, 2025.