Matco Small Cap Fund (Series F)
Fund Documents [LINK]    Fund Codes [LINK]     As at June 30, 2022 

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

$62.0 Million

Portfolio Manager

Anil Tahiliani, MBA, CFA

Dividend Yield

5.0%

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 June 30, 2022    
Annualized
Net of Fees 3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F -15.7% -13.5% -15.9% -2.2% 1.8% 1.8% 5.3% 6.0%

Growth of $10,000 since inception

Cumulative Returns

  3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F -15.7% -13.5% -15.9% -6.6% 9.2% 13.6% 68.3% 104.5%

 

  • Calendar Year Returns

    Calendar Year Performance 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
    Series F 13.2% 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 2016 
    to 2021    		 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 3.8% 4.2% 5.3%  3.5% 11.1% 11.6% 5.6%

  • Annual Distribution per Unit ($/unit)

      2021 2020 2019 2018 2017 2016 2015
    Income 0.35 0.11 0.63 0.66 0.42 0.28 0.26
    Capital Gains – – 2.10 - 0.50 - -
    Total Distributions: 0.35 0.11 2.73 0.66 0.92 0.28 0.26

Sector Allocation

Asset Mix

 

Top Holdings

 Canadian Dollar 5.4%
Olympia Financial Group Inc. 4.7%
Absolute Software Corporation 4.1%
MCAN Mortgage Corp. 3.7%
Yellow Pages Ltd.  3.6%
Magnet Forensics Inc. 3.6%
Tree Island Steel Ltd. 3.5%
Global X U.S. Infrastructure Development ETF 3.4%
Pulse Siesmic Inc. 3.3%
Information Services Corp. 3.3%

  • 5.4% - Canadian Dollar

  • 4.7% - Olympia Financial Group Inc.

    Provides trustee services, manages self-administered registered plans, and provides foreign exchange services.

  • 4.1% - Absolute Software Corporation

    Global provider of endpoint cybersecurity solutions for the business, government and education markets.

  • 3.7% - MCAN Mortgage Corp.

    Invests in a diversified portfolio of Canadian mortgages, commercial loans and real estate investments.

  • 3.6% - Yellow Pages Ltd.

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

  • 3.6% - Magnet Forensics Inc.

    A developer of digital investigation software that acquires analyzes, reports on and manages evidence from digital sources, including computers, mobile devices, IoT devices and cloud services.

  • 3.5% - Tree Island Steel Ltd.

    Leading supplier of quality steel wire and wire products for the industrial, construction and agricultural sectors.

  • 3.4% - Global X U.S. Infrastructure Development ETF

    Invests in U.S. infrastructure companies that may include the production of raw materials, heavy equipment, engineering, and construction.

  • 3.3% - Pulse Siesmic Inc.

    A market leader in the acquisition, marketing, and licensing of 2D and 3D seismic data to the western Canadian energy sector.

  • 3.3% - Information Services Corp.

    Provides registry and information services for public data and records.

Outlook

Global small-cap stocks have struggled relative to their large-cap peers. As recession fears have been building over the last few months, investors have rotated out of small caps into defensive large-cap names to provide shelter during the market selloff. Despite inexpensive valuations, strong balance sheets and attractive dividend yields, small-cap stocks in Canada and the U.S. remain unloved by investors.

We believe that patient small-cap investors will be rewarded over the long term, given we are still only in the second year of the economic expansion. The Fund remains well diversified and positioned for a rising interest rate environment. Its largest sector weights are Financials, Industrials and Materials, which contain companies that benefit from higher rates and have the pricing power to increase margins in this new environment.

The catalyst for small-cap stocks will be inflation peaking, as investors may rotate back into the sector. Meanwhile, Matco Small Fund investors get paid to wait with a dividend yield of over 5.2%.

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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.