The Pender Corporate Bond Fund returned 0.1% in November, a result lower than the potential run-rate return we see in the portfolio but, within the context of a choppy market, not altogether disappointing.Continue Reading
The Pender Corporate Bond Fund returned 0.6% in October, a fairly good result consistent with the Fund’s more cautious recent positioning. The monthly return was approximately equal to coupons received with a small portion of capital appreciation.Continue Reading
As active managers we are trying to build a portfolio of companies within our strategies that can provide strong, long term, risk adjusted returns for our investors. One of our key tenets is to find companies that fall within our Circle of Competence. When we are looking to gain an analytical edge over our competition and develop an alternative thesis to the market, it is critical to focus on industries and companies that we know very well. That way, when opportunities present themselves we can act quickly and decisively, with the conviction that we understand the underlying business and what it may be worth. And this is never more important that when Mr. Market goes a little crazy and provides us with a buying opportunity.Continue Reading
The Pender Corporate Bond Fund returned 0.8% in September, a decent result given that the bond market showed broad-based weakness. The Fund’s short duration and positioning in discounted credits allowed us to make money in an otherwise difficult environment.
Strong contributors in September included our holdings in Primero Mining Corp convertible notes as investors began to focus on possible credit upside related to indications of multiple potential bidders for the company. Our holdings of Novavax Inc convertibles also rose as a key competitor ended its own respiratory virus vaccine development and suggested it would be open to partnerships with other companies, such as Novavax.Continue Reading
“The markets are moved by animal spirits, and not by reason.” – John Maynard Keynes
The year started in the midst of one of the greatest bull markets in history. It has only strengthened in 2017. The S&P500 bull market is now the second longest (trailing only the 1990-2000 cycle during the dot-com era) and the third strongest in history. In his 2016 year-end commentary, Pender President and Portfolio Manager, Dave Barr mused about the improving merger and acquisitions environment. Forecasting is often perilous, but given the backdrop, this was a relatively safe prediction. After all, M&A activity tends to pick up near the end of bull cycles, when confidence amongst executives tends to be highest, corporate coffers are gushing with cash after the good times and executives take their cues from other acquisitive peers. Times may change, but human nature does not. Pender certainly benefited from these improving animal spirits. Two of our largest holdings – Panera Bread and Whole Foods – became targets of takeout offers in the second quarter. In contrast to many investors, we only viewed one of the acquisition announcements as great news because of how we categorize our investment universe.Continue Reading