- +2.82% (Class A)
- +2.87% (Class F)
CAPITAL INVESTMENT FUND
- -0.22% (Class A)
- -0.16% (Class F)
Is there a more depressing time of year than the grind of Q1 in Canada? Doubt it. The holidays are over, the summer seems like a long way away, and the days are short and cold. Don’t forget to prepare your taxes….that’s fun. Why did I go see Kong: Skull Island? That one’s on me. At least the days are getting longer and we’re really only a couple weeks away from Q2. For now, back to work.
Our Opportunities Fund had a strong February after a slow start to the year, and the Investment Fund did what it does when it’s at its best and clipped along with little volatility. The upward trajectory of the stock markets, especially south of the border, continues to set records. Is it too late to buy into these markets? Is it time to sell? Sadly, nobody knows the answers to those questions with any certainty, which makes it feel like a fools errand to predict the direction of the market at times. This is probably a great opportunity to remind everyone that our Investment Fund does not make any macro calls on direction either. It is completely market neutral and its goal is to make money by finding market inefficiencies and attempting to monetize them. Again, the direction of the market does not influence the performance of our Investment Fund. So, if this sustained market rally makes you anxious…investing in a product that is market neutral would make sense.
If you want clarification on any of our strategies, feel free to reach out and ask. Be happy to answer!
Please see Julian’s comments on January performance below.
Capital Investment Fund
Not much color in the Investment Fund this month. The small gains in the structured product arbitrage strategy were cancelled out by small losses in the volatility strategy. The merger arbitrage and multifactor strategies did not contribute significantly to this month's performance.
The Opportunities Fund rebounded 2.8% for the month of February. The largest contributor to that gain was the merger portfolio, with help from B/E Aerospace, whose acquisition by Rockwell Collins is expected to close this spring, along with the closing of Exxon Mobil’s acquisition of InterOil. The liquidation portfolio, led by liquidating closed-end fund Marrett High Yield Strategies, also contributed significantly. The special situations portfolio was also positive for the month, led by Allergan, Melcor Developments and Knight Therapeutics. The high yield and relative value strategies did not contribute significantly to this month's performance.
Julian Klymochko, CFA