September 2017 | Caldwell Canadian Value Momentum Fund Commentary

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September Recap:

The Fund gained 2.8% in September versus a gain of 3.1% for the S&P/TSX Composite Total Return Index ("Index”). Energy (+7.4%) reversed weak year-to-date performance to drive the market higher on the back of a 9.4% increase in the price of crude oil. Consumer Discretionary (+5.5%) was also a strong performer driven by auto parts producers: Magna (+10.8%), Linamar (+9.3%) and Martinrea (+4.0%). While the Index posted an overall gain, traditionally defensive sectors such as Consumer Staples (-0.3%) Materials/Gold (-4.0%/-8.5%), REITs (-0.5%), Telecom (-1.3%) and Utilities (-2.3%) all posted negative returns. This was in sympathy with bond yields continuing to move higher after the Bank of Canada made its 2nd (surprise) rate increase on September 6, 2017. 


Top CCVMF performers in September were Enerflex (+17.5%), IBI Group (+11.0%) and Transcontinental (+7.4%). Enerflex moved higher on the strength in Energy.  The company is benefiting from the build-out of infrastructure around natural gas plays and has the ability to grow in value without needing commodity prices to move higher.  IBI Group has been gaining strength after a solid earnings report in mid-August. The company is well positioned to capitalize on infrastructure spend, particularly in transit, and continues to trade at a discount to peers despite attractive organic growth and margins. Transcontinental moved higher on a strong earnings report that beat expectations on both revenue and expenses. Organic growth showed strong improvement and the company continues to execute its transformation plan, using robust and steady cash flow from its printing division to grow its flexible packaging business. 
No stocks were added to the portfolio in September. 


The Fund held an 18% cash weighting at month end (cash at the time of writing is 13%).  We look forward to tracking the progress of the portfolio’s holdings as we see a meaningful and diverse set of catalysts to drive continued growth. 

We thank you for your continued support.
The CCVMF Team

The information contained in this document is designed to provide general information related to investment alternatives and strategies and is not intended to be investment or any other advice applicable to the circumstances of individual investors. We strongly recommend you to consult with a financial advisor prior to making any investment decisions. Unless otherwise specified, information in this document is provided as of the date of first publication and will not be updated. All information herein is qualified in its entirety by the disclosure found in the CCVMF’s most recently filed simplified prospectus. Information contained in this document has been obtained from sources we believe to be reliable, but we do not guarantee its accuracy. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing in this product. Unless otherwise indicated, rates of return are the historical annual compounded total 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 security holder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The CCVMF is a publicly offered mutual fund that offers its securities pursuant to simplified prospectus dated July 20, 2017. The CCVMF was not a reporting issuer prior to that date and formerly offered its securities privately as follows: Series F and Series I since March 28, 2014 and Series O since August 8, 2011. The expenses of the CCVMF would have been higher during the period prior to becoming a reporting issuer had the fund been subject to the additional regulatory requirements applicable to a reporting issuer. Inception Date: August 8, 2011. Principal Distributor: Caldwell Securities Ltd.

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