Month End Recap:
For the month of November, the Caldwell Canadian Value Momentum Fund (CVM or Fund) gained 6.4% versus a gain of 6.3% for the S&P/TSX Composite Total Return Index (Index). From a sector standpoint, Information Technology, Financials, and Consumer Staples were relative outperformers, whereas Communication Services, Healthcare, and Materials underperformed.
Top performers in the month of November were Fairfax Financial Holdings (FFH), Hammond Power Solutions (HPS.A), and RB Global (RBA). FFH rerated higher upon delivering a robust quarter driven by considerably improved underwriting income as well as higher earnings through its associates and non‑insurance companies. HPS.A rerated higher as investors likely started seeing beyond the slight revenue miss in the recent quarterly earnings and began to appreciate the company’s pricing strength, which should allow it to continue delivering improved profitability in the medium-term. RBA performed well as the company announced that IAA, its digital marketplace brand connecting vehicle buyers and sellers, was selected as the sole salvage provider for Suncorp, which is a leading insurer in Australia. Furthermore, the company appears to be gaining market share in the domestic U.S. market.
During the month of November, the Fund initiated positions in Tamarack Valley Energy (TVE), ARC Resources (ARX), and WELL Health Technologies (WELL). TVE is a junior oil and gas exploration and production company with a core operational focus on oil development in the western Canadian sedimentary basin. Its progress in waterflooding – a secondary recovery method where water is injected into the reservoir formation to displace residual oil and increase production from mature fields – in the Clearwater area is encouraging, demonstrating potential to generate significant value. Additionally, operational improvements are enhancing capital efficiencies through reduced capital expenditures and higher production growth. ARX is an oil and gas producer that is approximately 60% weighted to natural gas. Its operations are primarily situated in northeast British Columbia and Alberta. Strengthening demand for natural gas, driven by electricity shortages, provides a favourable backdrop for the company. Furthermore, there is renewed optimism regarding its Liquefied Natural Gas (LNG) projects. WELL is a Vancouver-based digital health company focused on modernizing and consolidating the primary healthcare sector through technology-enabled services and digital experiences. Its offerings span primary care, telehealth, and a network of clinics across Canada and the U.S. The company also provides clinical software and services, including electronic medical records, billing, e-Referrals, and cybersecurity solutions. The company is positioned for growth through consolidation of a fragmented Canadian primary and specialty care market, significant operational efficiencies from digitization, and reduced staffing costs. As it scales, WELL’s network effects should deepen the integration between its primary and specialty clinics, and portfolio restructuring – including spinning out certain U.S. and Software as a Service (SaaS) divisions – has the potential to unlock additional value.
The Fund held a 1.8% 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 November 30, 2024:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: 18.9%, 3 year: 6.1%, 5 year: 9.7%, 10 year: 8.7%, Since Inception (August 29, 2014): 8.7%.
S&P/TSX Composite Total Return Index: 1 Year: 30.7%, 3 year: 10.9%, 5 year: 11.9%, 10 Year: 8.2%, Since Inception (August 29, 2014): 8.2%.
Actual Investments, first purchased: ATRL 5/16/2024, AEM 4/1/2024, K 9/13/2024.
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: December 19, 2024.