Matco Small Cap Fund (Series F)
Fund Documents [LINK]    Fund Codes [LINK]     As at March 31, 2021  

Investment Profile
The Fund invests in small to mid-sized dividend-paying Canadian companies that are typically growing faster than the economy. The Fund seeks to generate regular dividend income plus long term capital appreciation.

Fund Inception Date

2010

Fund Net Asset Value

$60.5 Million

Portfolio Manager

Anil Tahiliani, MBA, CFA

Dividend Yield

3.9%

Is this fund for you?

• You typically have a 5+ year investment horizon

• You are seeking above-average capital gain potential

• You can tolerate medium to high risk on your investment

• You can withstand volatility in the value of the fund's securities

 

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Geographic Profile

Canadian-focused
The Fund has the flexibility to look for the best small-cap companies in North America. This includes up to 30% in U.S Small Cap companies.

Strategy

The Fund invests in a focused portfolio of 30-35 highest conviction companies.

The fund focuses on companies that meet Matco’s strict investment criteria which include:

  • Quality
  • Income
  • Growth
  • Value
  • Risk

Investor Education

  • Assess the fund’s performance over a 5-year period in order to recognize the fund’s true value

  • Understand this Fund is not intended to be a complete investment program for all investors

  • Ensure you have an investment time horizon of 5+ years

  • Understand that at times the fund’s performance may be out of sync with the market

  • The companies’ earnings growth cycle may fluctuate over time

  • Learn about Matco and our investment philosophy

 

Performance (Series F)

As at March 31, 2021    
Annualized
Net of Fees 3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F 9.9% 9.9% 61.9% 4.0% 5.7% 4.3% 5.9% 7.8%

Growth of $10,000 since inception

Cumulative Returns

  3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F 9.9% 9.9% 61.9% 12.3% 31.9% 34.4% 76.6% 129.5%

 

  • Calendar Year Returns

    Calendar Year Performance 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
    Series F 0.2% 10.5%  -12.3% 9.6% 15.1% 5.9% 1.4% 25.1% 12.1% -12.7% 29.7%
  • Rolling 5-Year Returns

      From 2015 
    to 2020
    From 2014
    to 2019 
    From 2013
    to 2018
    From 2012
    to 2017
    From 2011
    to 2016
    From 2010
    to 2015
    Series F 4.2% 5.3%  3.5% 11.1% 11.6% 5.6%
  • Annual Distribution per Unit ($/unit)

      2020 2019 2018 2017 2016 2015
    Income 0.11 0.63 0.66 0.42 0.28 0.26
    Capital Gains 2.10 - 0.50 - -
    Total Distributions: 0.11 2.73 0.66 0.92 0.28 0.26

Sector Allocation

Asset Mix

Top Holdings

Intertape Polymer Group Inc. 4.7%
Corus Entertainment Inc. 4.3%
Leon's Furniture Ltd. 4.2%
Labrador Iron Ore Royalty Corp. 4.1%
Cash 4.0%
goeasy Ltd. 3.9%
First National Financial Corp. 3.8%
Yellow Pages Ltd. 3.8%
Transcontinental Inc. 3.6%
Bird Construction Inc. 3.6%
  • 4.7% - Intertape Polymer Group Inc.

    Develops and manufactures a variety of pressure sensitive papers, films and protective packaging for industrial and retail use

  • 4.4% - Corus Entertainment Inc.

    Provides media and content development for television, radio and digital properties globally

  • 4.3% - Leon's Furniture Ltd.

    Canada's largest retailer of furniture, appliances and electronics and owns The Brick brand.

  • 4.2% - Labrador Iron Ore Royalty Corp.

    The company receives a royalty and per tonnage commission on all iron ore products produced, sold and shipped by Iron Ore Company of Canada.

  • 4.1% - Cash

  • 3.9% - goeasy Ltd.

    A financial services company that provides non-prime and lending services across Canada.

  • 3.9% - First National Financial Corp.

    Canada's largest non-bank mortgage provider for the residential and commercial markets

  • 3.8% - Yellow Pages Ltd.

    A Canadian digital media and marketing company that operates online properties such as YP.ca, Canada411 and 411.ca.

  • 3.7% - Transcontinental Inc.

    A leading flexible packaging and printing company with operations in Canada, the U.S. and Latin America.

  • 3.6% - Bird Construction Inc.

    A national diversified construction company providing design, build, maintenance, repair and operation services to various sectors.

Outlook

During the first quarter, small-cap stocks globally outperformed their large-cap peers. All-Country Small Cap Indexes were up approximately 9% versus the All-Country Large Cap Indexes which were up approximately 4%. Investors have rotated into small-cap stocks in anticipation of higher domestic and global growth. In Canada, CIBC estimates GDP growth at 5.6% and 4.4% for 2021 and 2022, respectively. The International Monetary Fund (IMF) recently projected 6% global GDP growth for 2021, up from its estimate of 5.5% in January. For 2022, the IMF is estimating global growth of 4.4%. Despite the negative headlines about a third wave of the COVID-19 virus and the rise of variants, the underlying Canadian and global economies remain strong. The low-interest rate environment globally should benefit small-cap companies in a few ways. First, the cost of borrowing remains low, making capital expenditures for businesses more attractive. Second, funding acquisitions through debt or equity is very appealing. Third, low rates have driven a higher allocation of capital into equities relative to fixed income. As a result, small-cap stocks are in the “sweet spot” of investing for at least the next two years. We believe that the Matco Small Cap Fund is well-positioned to benefit from domestic and global growth. The Fund’s underlying investment characteristics remain very appealing relative to its benchmark. As of March 31st, the Fund had an attractive dividend yield at 3.9%. Although the Fund remains underweight in commodities such as energy, base metals, and gold/silver, we believe that our positioning presents an attractive return to risk proposition for investors, with low earnings volatility going forward.

Performance returns for the Matco Mutual Funds are calculated by Matco Financial Inc. These returns are calculated and reported in Canadian dollars and are historical simple returns for the 3 month, YTD and 1 year periods and annualized compounded total returns for periods after 1 year. They include changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. A cumulative return on an investment is the aggregate amount that the investment has gained or lost over time, independent of the amount of time involved, expressed as a percentage. Calendar year return reflects the compound rate of return over the specified calendar year (January 1st to December 31st). Matco Fund returns are calculated after management fees and operating expenses have been deducted.