PenderFund

Pender Corporate Bond Fund – Manager’s Commentary – April 2018

Written on . Posted in Commentaries, Insights & Ideas, Pender Corporate Bond Fund

The Pender Corporate Bond Fund returned 0.6% in April, a reasonably good result given the continuing upward bias of the trend in interest rates.

Strong performers for the Fund in April included our position in convertible notes of SunPower Corp, which rose multiple points on the company’s steps to acquire US-based manufacturing capacity, seen as a solution to current tariff concerns. We like prospects for solar power in the longer term and believe the SunPower position has further potential upside for the Fund. Also driving gains was our position in 2nd lien bonds of W&T Offshore as rating agencies upgraded the company’s credit in recognition of the progress the company has made in growing cashflows and de-leveraging. Other boosts were provided by a new position in Aceto converts, discussed below, and strength in Aimia preferred shares.

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Manager’s Quarterly Commentary – David Barr – Q1 2018

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

Increased Volatility and Continued Underperformance by Canadian Indices

The Moment We’ve All Been Waiting For

That was an interesting quarter. One thing didn’t change: Canada is out of favour. Canadian indices continued their lacklustre performance. What did change in the quarter was a dramatic spike in volatility and market turbulence. As a result, most major indexes are now down year to date in North America.

I started by saying it was an interesting quarter and, for the Pender investment team, interesting means we are finding investment opportunities that are actionable. As you might expect the volatility gave us a chance to deploy capital. Across the majority of our equity funds, we have taken down our cash positions quite extensively. In the Pender Value Fund for example, we decreased cash from 29% at the end of December to 6% at the end of March. And this is after we received cash equal to about 5% of the portfolio on the sales of both Key Technologies and Avigilon in the quarter.

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Pender Corporate Bond Fund – Manager’s Commentary – March 2018

Written on . Posted in Commentaries, Insights & Ideas, Pender Corporate Bond Fund

The Pender Corporate Bond Fund returned 1.2% in March, a good result within difficult market conditions.

Strong performers for the Fund in March included our position in convertible notes of Amyris, which rallied more than 20% on a positive earnings report and improved cash flow outlook. We also saw strength in our investment in KeyW Holdings, where strong quarterly results boosted convertible note prices. Further, our position in Puerto Rico bonds continued to rally, as the island’s fiscal authority forecast better than anticipated bondholder recoveries.

The gains above were offset to a degree by generally softer prices for investment grade bonds and specific weakness in a few individual credits. Orexigen converts fell as the company announced a Chapter 11 filing in conjunction with the announced auction of its business. We continue to be hopeful of a good outcome in this small position once the sale has been completed.

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Manager’s Q4 Commentary – Felix Narhi

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

“Since 1871, the market has spent 40% of all years either rising or falling more than 20%. Roaring booms and crushing busts are perfectly normal.” – Morgan Housel

Last year was a banner year in the US markets. Following the election of Trump, the S&P500 bolted out of the gates on initial optimism for deregulation across many sectors and ended the year with investors cheering huge US corporate tax cuts. In what has become a familiar refrain, a handful of mega cap internet and technology stocks continued their momentum.

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Pender Corporate Bond Fund – Manager’s Commentary – February 2018

Written on . Posted in Commentaries, Insights & Ideas, Pender Corporate Bond Fund

The Pender Corporate Bond Fund returned 0.5% in February, not a large gain but, within the context of generally weak market conditions, an acceptable result. 

Strong performers for the Fund in February included our position in the distressed General Obligation bonds of Puerto Rico which rallied on investors’ more positive view as the island’s recovery and debt restructuring efforts showed progress. Our position in Rite Aid 2023 bonds rallied over 10% on the news of that company’s merger with Albertson’s, an event that triggers a work-out of this issue at (or above) 101% of face value. In addition, our position in the 2019 convertible notes of Synchronoss Technologies rose strongly on news of a credit-positive equity financing, combined with that company’s progress in addressing corporate reporting issues. Our interest in post-petition claims of Samson Resources also rallied on expectations of higher recovery from legal claims.

The gains above were offset to a degree by some weakness in investment grade credit and certain closed-end funds.

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