PenderFund

2016 – Summary of Performance and Process

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Stocks rarely perform in the time frames we predict, which is why the market works best for investors who have a long-term portfolio focus. Volatility in short-term returns, especially with the relatively concentrated strategies we deploy, comes with the territory and we don’t place too much emphasis on it in any given year. Nevertheless, despite a bumpy ride as various macro events shook the markets, 2016 was a great year for Pender.

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Active Management: Taking Advantage of Passive Instruments. Again.

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If you want returns on an investment to double, it comes down to simple math. You must purchase a security at 50% of its selling price. The purchase is simple, however, which security and “when” are not so simple.

At Pender we are fundamental, active, value investors who base our investment process on taking advantage of market inefficiencies, such as when  a company becomes significantly mispriced in comparison to what the business is worth either to a third party acquirer, its liquidation value or the risk adjusted present value of its future cash flows. Basing investment decisions on fundamentals makes intuitive sense to us, but we also realize there are many kinds of market participants that have their own investment rational (or irrational, as the case may be).

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Active Management: How active management can take advantage of passive instruments in the credit markets

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Credit markets are in a state of transition, with passive instruments such as ETF’s having become major parts of the investing landscape in recent years. Within this context, active management faces some challenges but can also be positioned to take advantage of key limitations of these large and passive instruments.

“A lot of credit managers are simply in denial regarding the growing presence of ETF’s in their market,” says Pender Corporate Bond Fund Manager, Geoff Castle. “However these instruments are here to stay. The good news is that if you study both the composition and the behaviour of ETF’s in credit markets, you will find some very interesting ways to exploit them.”

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Active Management: Why choose a true Active Manager?

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With the striking increase in the number of low cost passive funds now available, whether your investments are actively or passively managed is becoming a bigger concern for investors these days. Research and publicity, not to mention returns, are all playing into the debate of which style is best. At the end of the day, your advisor will recommend a diversified portfolio of investments; however we will dive into a few of the myths and realities of active management here.

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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The indicated rates of return are the historical annual compounded total returns including changes in net asset value and assume reinvestment of all distributions and are net of all management and administrative fees, but do not take into account sales, redemption 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. This content is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter and is provided for your information only. Every effort has been made to ensure the accuracy of its contents.