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Above-average CI Cambridge Canadian Growth Companies Fund
1/23/2018 12:56:28 AM
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By Dave Paterson  | Wednesday, December 27, 2017


 



Apart from a blip in 2015, CI Cambridge Canadian Growth Companies Fund has posted absolute and risk-adjusted performance numbers that have been well above average. For the five-years ending Nov. 30, it delivered an average annual compounded rate of return of 14.9%, while the S&P/TSX Completion Index rose by 6.7%. The fund’s performance garnered it the Fundata A+® Award for 2014 and 2015.

The fund is actively managed and is benchmark agnostic. Unlike the CI Cambridge Pure Canadian Equity Fund, this mandate has more flexibility, and can invest up to 49% of the fund outside of Canada. Regardless of the geography, the managers look for companies that have a management team that is aligned with shareholders, a history of sound capital allocation, and a strong competitive advantage.

The investment process is very much a bottom-up approach, and the portfolio tends to be divided into a couple of buckets. The first is core holdings, which they consider to be longer-term, well-managed, attractive investments. The second bucket is what they consider to be opportunistic holdings, which they view as short-term trading opportunities that are the result of a mispricing in the market. The allocation between the two will be the result of the available opportunity set.

As of the end of November, top holdings included Middleby Corp. (NASDAQ: MIDD), TFI International Inc. (TSX: TFII), Athene Holding Ltd. (NYSE: ATH), Auto Trader Group Plc (LON: AUTO), and Tourmaline Oil Corp. (TSX: TOU).

The approach tends to skew a bit more to the growth side of the spectrum, as they are looking to find companies that have the potential to move their share prices upwards. That said, valuation is still a consideration, and they want to avoid overpaying for that potential growth.

They tend to carry more cash than some of their peers. There are a couple of reasons for this: first, to play some defense in volatile times; and second, to make sure they have sufficient “dry powder” to take advantage of opportunities as they arise. At the end of November, cash sat at 14%.

Volatility can run a bit higher than average, with a 3-year average standard deviation of 10.14%. But if you have the stomach for it, this can be an excellent addition to a well-diversified portfolio

CI Cambridge Canadian Growth Companies Fund
Fund company:
CI Investments
Fund type:
Canadian Focused Small/Mid Cap Equity
FundGrade™ Rating: B (November)
FundGrade A+ Award: 2014, 2015
Style: Mid-Cap Growth
Risk level: Medium
Load status: Optional
RRSP/RRIF suitability: Good
Manager: Greg Dean since September 2012
MER: 2.44%
Fund code: CIG11358 (low load)
Minimum investment: $500

Dave Paterson, CFA, is the Director of Research, Investment Funds for D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due diligence on a variety of investment products. He is also the publisher of Dave Paterson’s Top Funds Report, offering regular commentary and in-depth analysis of Canada’s top investment funds. He uses a unique analytical approach to identify funds with strong, risk-adjusted returns, and regularly publishes his insights and analyses in Fund Library.

Notes and Disclaimer

© 2017 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. No guarantee of performance is made or implied. This article is for information purposes only and is not intended as personalized investment advice.

 

 
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