October 2022 | Caldwell Canadian Value Momentum Fund Commentary

October Recap:

The Caldwell Canadian Value Momentum Fund (“CVM” or “the Fund”) gained +5.1% in October versus a gain of +5.6% for the S&P/TSX Composite Total Return Index (“Index”). At the sector level, Energy, Information Technology (“IT”), and Consumer Discretionary were relative outperformers, while Utilities, Materials, and Gold underperformed. Energy performed well in the month, which was not dissimilar from its resilient year-to-date performance, aided by elevated oil and gas prices. IT and Consumer Discretionary also fared well as the perception that the pace of interest rate hikes would slow shifted the market sentiment to a more “risk-on” mode, which also led to the relative underperformance of the more defensive sectors such as Utilities and Gold.

Top performers in the CVM’s portfolio for the month of October were NuVista Energy (“NVA”, +37.7%), ATS Automation Tooling Systems (“ATA”, +18.2%), and Cenovus Energy (“CVE”, +29.8%). NVA and CVE - both integrated oil and natural gas companies - rallied more or less in-line with the oil and gas industry, supported by a surge in global energy prices during the month. ATA continued to benefit from strong secular growth in the global electric vehicle (“EV”) market. The company secured a record contract from an existing customer, demonstrating the ability to drive greater wallet share over time. This contract builds on already solid order momentum over the last few quarters and ATA is still in talks with other EV companies for automation projects, all of which support a robust medium to long term growth outlook.

During the month of October, the Fund initiated positions in Aritzia (“ATZ”), Winpak (“WPK”), and Stantec (“STN”). ATZ is a vertically integrated omni-channel apparel retailer, targeting upper-middle class women aged 15-45, with over 100 stores across North America. Its brand recognition continues to expand as it experiences accelerated sales growth driven by international and e-commerce expansion, which is highly sustainable as it currently has very low penetration in the United States. WPK manufactures and distributes packaging materials, and packaging machines under the Rigid Packaging & Flexible Lidding, Flexible Packaging, and Packaging Machinery segments. WPK possesses technological advantages over competitors and the company’s activity levels typically remain stable during economic downturns, making it an attractive defensive holding for a recessionary environment. STN provides consulting, engineering, and design services to private and public clients in infrastructure, commercial, environmental, and energy end markets. STN is strongly positioned to benefit from U.S. public sector spending as well as reshoring activity in the private sector, including new semiconductor facilities in North America.

The Fund held a 19.1% cash weighting at month-end. 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.

¹Standard performance as at October 31, 2022:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: -6.7%, 3 year: 9.4%, 5 year: 7.3%, Since Inception (August 29, 2014): 8.0%.
S&P/TSX Composite Total Return Index: 1 Year: -4.9%, 3 year: 8.8%, 5 year: 7.1%, Since Inception (August 29, 2014): 5.8%.

²Actual Investments, first purchased: NVA 3/10/2021, ATA 2/16/2018, CVE 1/6/2022, SCL 10/31/2018.

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: November 11, 2022