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.Continue Reading
At the time of writing, David Barr’s track record for picking small cap take-out1 targets stands at 40 portfolio holdings taken out since the Pender Small Cap Opportunities Fund was launched (June 2009). In just over seven years, that averages out to around one every two months.
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).Continue Reading
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.”Continue Reading
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.Continue Reading