Wisdom from movies: The Princess Bride, 1987
Logic and methodology are baked into our DNA. We are a conservative investment manager – this means that we use our four pillars to guide us as we focus on a core concentration of Canadian, U.S., and International companies and Canadian Bonds to build and preserve wealth for our clients.
We use our M-Factor process driven investment approach designed to provide robust and resilient long-term investment returns. This process is focused on key investment factors that have been identified, backtested and proven over time. The process is focused on long-term risk management over short-term performance. We take the emotion out of investing during the ups and downs of the markets by building resilient portfolios.
We do not manage to benchmarks. We manage assets based on an investment process that has been backtested and focused on providing the best risk adjusted returns for our clients. Our sector weights are based on our process and not the weight in the specific benchmark index. We are comfortable being different than our peers and our benchmarks since we prefer to stand apart from the crowd.
Our equity portfolios are focused on the 30-35 best companies based on our strict M-Factor investment process. A concentrated portfolio to ensure a better capital allocation discipline and allows the manager to better understand the key investment characteristics driving each company.
All our portfolios are focused on generating quarterly income. Our equity portfolios consist of companies that can sustainably pay and grow their dividend over time. The ultimate goal is to generate income and capital gains on an after-tax and fee basis so clients can meet their long-term financial objectives. We like to get paid to wait for capital appreciation.
Our portfolios will be 95% invested in the underlying securities as per the Fund’s mandate. We do not try to time the market or guess the next recession or boom. Timing involves two decisions, first when to sell and then when to buy – getting these both right consistently involves luck and not skill. As money managers, we are focused on long-term capital growth and income for clients.
In the investment world, every year fads come and go and speculative bubbles in the “hottest” new sector being hyped by marketers pop up. These companies will not meet our M-Factor investment process and as a result, we are likely to miss the latest concept story that investors are in love with; and we are fine with that since we will stick to our investment process.
We only buy investment-grade bonds for our investment portfolios. The added credit risk in the high yield bond market does not typically reward investors with greater returns. We focus on federal, provincial, municipal and investment-grade bonds for our fixed income allocation.
As conservative investment managers, we do not use leverage to enhance returns. Using leverage can significantly magnify portfolio volatility and can cause portfolio losses that are difficult to recover. We do not short (bet that stock prices will fall) stocks, this is a risky bet that could lead to large losses. We prefer to systematically invest clients' assets and not gamble with them.
As investment professionals with a fiduciary duty, we always put our clients' interests above everything else. Our first meeting is a discovery phase to better understand your financial needs and objectives. This will cover items such as your retirement goals, family situation, occupation, risk tolerance, current compensation and assets. If you have a complex financial situation we have in-house professionals that can help or we may recommend you to other tax, legal, estate professionals that we work with.
Second, we put together a long-term asset mix recommendation and implementation plan based on where we can add value to your financial goals. A portfolio manager will meet with you either in person or over the phone to go through the recommendations and answer any questions.
Third, as a client you will receive ongoing communication from us which includes the following:
Online access to your portfolio
Regular blogs about timely investment topics
Quarterly newsletter which includes a one-page write up on each of the Matco Funds discussing fund activity, sector weights, performance, top ten holdings and outlook
Annual Outlook presentation which discusses the key investment themes for the year and our portfolio positioning
Monthly client statements
Annual portfolio review meeting either by phone or in person
Fourth, our service offerings are as follows:
Matco Mutual Funds – minimum of $25,000 per fund
Investment Counselling – minimum of $1 million, fees are scaled with a tiered fee schedule
Family Office Service – minimum of $5 million, fees are scaled with a tiered fee schedule
Group RRSP Plans – no minimum, fees are scaled with a tiered fee schedule
Condominium Corporations – no minimum, fees are scaled with a tiered fee schedule