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Pender Corporate Bond Fund – Manager’s Commentary – September 2017

Written on . Posted in Commentaries, Pender Corporate Bond Fund

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.

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Manager’s Quarterly Commentary – Felix Narhi – Q2 2017

Written on . Posted in Commentaries, Pender Strategic Growth and Income Fund, Pender US All Cap Equity Fund

“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.

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Pender Corporate Bond Fund – Manager’s Commentary – August 2017

Written on . Posted in Commentaries, Pender Corporate Bond Fund

The Pender Corporate Bond Fund had a flat result in August, neither losing nor gaining materially in overall net asset value. A group of bonds that declined in price offset the coupon income we received from our investments. Nevertheless, the month was an important period from the fund management point of view as we added several new positions that we believe will drive further gains going forward.

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Manager’s Quarterly Commentary – David Barr – Q2 2017

Written on . Posted in Commentaries, Pender Canadian Opps Fund, Pender Select Ideas Fund, Pender Small Cap Opps Fund, Pender Value Fund

We are well into summer now, our favourite time of year for taking a step back and reading about bigger picture topics that deepen our investing skill set. Halfway through the year we can assess how a couple of trends we have discussed in the recent past are either playing out as we anticipated or have continued on their merry way. We think it would be useful to revisit our last two manager’s commentaries to provide an update on current situations.

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Pender Corporate Bond Fund – Manager’s Commentary – July 2017

Written on . Posted in Commentaries, Pender Corporate Bond Fund

The Pender Corporate Bond Fund returned 0.5% in July, a reasonable result in a market that saw significant drawdowns in the benchmark credit indices.  Driving the performance of the Fund in July was strong appreciation in floating and fixed-reset rate preferred shares, as these rose with rising Government of Canada bond yields.  In addition, certain individual credit positions performed well.  For example, Grupo Famsa 7.25% notes of 2020 rallied over 10% as the Mexican furniture retailer and consumer finance company raised long-term bank debt, and consequently was able to announce a partial redemption of these US dollar notes at 103% of face value.  Offsetting these gains, to a degree, was a decline in some longer-duration credits that were affected by rate increases.

Download the full commentary as a pdf.

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