Month End Recap:
For the month of September, the Caldwell Canadian Value Momentum Fund (CVM or Fund) gained 0.8% versus a gain of 3.1% for the S&P/TSX Composite Total Return Index (Index). From a sector standpoint, Healthcare, Utilities, and Financials were relative outperformers, whereas Energy, Consumer Staples, and Industrials underperformed.
Top performers in the month of September were Aritzia (ATZ), Primo Water (PRMW), and Chartwell Retirement Residences (CSH.UN). ATZ performed well as its latest stores continued attracting new customers while demonstrating solid economics. This particularly bode well for the stock provided the considerable network growth that is set to come in through the remainder of the year. PRMW rerated higher as the company received all regulatory approvals required for its pending merger with BlueTriton. The transaction is set to close by the end of this year, which is a welcomed development by its investors. CSH.UN continued its strong performance from the prior month as its retirement portfolio’s occupancy rates continued to improve. Additionally, its leading indicators, such as initial contracts, signed leases and tours also trended in the right direction, suggesting continued strength for the company going forward.
During the month of September, the Fund initiated a position in Kinross Gold (K). K is the fourth-largest North American gold producer and the largest pure gold play with operations in the Americas and West Africa, generating approximately 95% of its revenue from gold and the remainder from silver. In addition to a significant pipeline of lower-cost organic growth opportunities, the company provides attractive exposure to the current strength in gold spot prices.
For the third quarter of 2024, CVM gained 3.1% versus a gain of 10.5% for the Index. Top contributors to performance were Chartwell Retirement Residences (CSH.UN), Element Fleet Management (EFN), and Agnico Eagle Mines (AEM). CSH.UN was also a top performer in the month of September and was already discussed in the monthly section above. EFN delivered strong earnings and its acquisition of Autofleet was well received by investors as it should enable the company to accelerate its digitization and automation plans, which should unlock access to new revenue streams. AEM rerated higher as the company achieved record operating margins and generated strong free cash flows aided by favourable gold prices. Additionally, investors appreciated its continued focus on capital discipline and cost control actions, which ensure that the benefit from favourable commodity prices efficiently flows through to shareholders.
The Fund held a 0.3% 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 September 30, 2024:
Caldwell Canadian Value Momentum Fund (Series F): 1 Year: 11.8%, 3 year: 4.3%, 5 year: 9.0%, 10 year: 8.9%, Since Inception (August 29, 2014): 8.1%.
S&P/TSX Composite Total Return Index: 1 Year: 26.7%, 3 year: 9.5%, 5 year: 10.9%, 10 Year: 8.1%, Since Inception (August 29, 2014): 7.6%.
Actual Investments, first purchased: NFI 11/4/2022, PRMW 8/7/2024, CSH.UN 11/2/2023.
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: October 18, 2024.