• -0.08% (Class A)
  • +0.00% (Class F)


  • +2.41% (Class A)
  • +2.24% (Class F)


  • -32.23% (Class A)
  • -32.17% (Class F)

Dividend Distributions for 2017 - no distributions were allocated for either RSIF or RSOF in 2017

Capital Investment Fund

The Capital Investment Fund declined -0.1% for the month of January.  While most of January was relatively quiet, volatility began picking up later in the month and spiked at the start of February. We had exited the Fund’s volatility arbitrage investment once the signal indicated early in the month to do so. This strategy side-stepped the rapidly increasing recent volatility. 

We are seeing early signs that the recent ramp in volatility is opening up more interesting arbitrage trading opportunities.  The Fund was active in January in its relative value strategy, adding four new investments. We remain intently focused on deploying all of the Fund’s capital into attractive arbitrage investments. 

Opportunities Fund

The Opportunities Fund gained 2.4% for the month of January.  The merger strategy drove returns for the month largely attributed to CanniMed Therapeutics and Aurora Cannabis striking a friendly takeover deal.  In November, Aurora announced the hostile takeover of CanniMed for $24.00 per share.  

Typically, in a Canadian hostile takeover, the target tends to trade at a premium to the outstanding bid in anticipation of a higher offer.  In the case of CanniMed, the Fund was able to acquire CanniMed shares at a 17% discount to the offer.  The two parties struck a friendly deal in January at $43.00 per share, representing a 79.2% bid increase.   

Historically, hostile takeovers have been a lucrative and inefficiently priced area which the Fund invested in.  The space has seen a lull since the new regulatory take-over bid regime was released in early 2016. Hopefully Aurora’s hostile-to-friendly takeover of CanniMed further spurs further unsolicited M&A in Canada.  Certainly, we are seeing more consolidation activity in the cannabis sector, which may benefit our merger arbitrage strategy. 

The Fund acquired two new merger arbitrage investments and one new special situation investment during the month.

Cryptocurrency Investment Fund

The Cryptocurrency Investment Fund declined -32.2% for the month of January. After reaching a peak of US$19,511 on December 17th, bitcoin entered into a bear market, suffering a peak-to-trough decline of -69.6% to $5,922, the intra-day low reached on February 5th.  Despite this significant drop, bitcoin is still up 1,099% year over year as at the end of January.  One does not attain these types of considerable returns without suffering through bouts of significant volatility. Given the recent volatility in bitcoin of over 130%, one should size the investment appropriately and be able to withstand the price swings without liquidating at the lows.  Historically, bitcoin has suffered through many bear markets and thus far has always recovered onto new highs. 

With a total market value outstanding of $168bn, bitcoin’s current price pales in comparison to that of gold, its less useful store-of-wealth comparable, whose above ground stock is worth around $8 trillion (nearly 50x more than BTC). It’s easy to see how cryptocurrency continues to provide a call-option like payoff for those willing to take a long-term view.  

Julian Klymochko, CFA 

Trout Taylor