Matco Small Cap Fund (Series F)
Fund Documents [LINK]    Fund Codes [LINK]     As at June 30, 2020  

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

$40 Million

Portfolio Manager

Anil Tahiliani, MBA, CFA

Dividend Yield

4.4%

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

  • 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

 

  • 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

Performance (Series F)

As at June 30      
Annualized
Net of Fees 3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F 15.8% -21.2% -25.0% -4.3% -1.8% 2.5% 5.3% 4.9%

Growth of $10,000 since inception

Cumulative Returns

  3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F 15.8% -21.2% -25.0% -12.4% -8.8% 18.6% 67.0% 64.2%

 

  • Calendar Year Returns

    Calendar Year Performance 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
    Series F 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 2014
    to 2019    		 From 2013
    to 2018    		 From 2012
    to 2017    		 From 2011
    to 2016    		 From 2010
    to 2015
    Series F 5.3% 3.5% 11.1% 11.6% 5.6%

  • Annual Distribution per Unit ($/unit)

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

Sector Allocation

Asset Mix

Top Holdings

Canadian Dollar 4.5%
goeasy Ltd. 4.1%
Richards Packaging Income Fund 4.0%
Northview Apartment REIT 3.9%
Absolute Software Corp. 3.9%
Labrador Iron Ore Royalty Corp. 3.9%
Yellow Pages Ltd. 3.7%
Calian Group Ltd. 3.6%
Bridgemarq Real Estate Services Inc. 3.5%
The North West Company Inc. 3.5%

  • 4.5% - Canadian Dollar

  • 4.1% - goeasy Ltd.

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

  • 4.0% - Richards Packaging Income Fund

    The third largest packaging distributor in North America targeting small to medium sized businesses.

  • 3.9% - Northview Apartment REIT

    The company owns and manages a portfolio of approximately 27,000 residential suites and 1.2 million square feet of commercial space across Canada.

  • 3.9% - Absolute Software Corp.

    The company develops and operates cybersecurity software for the corporate, government and education sectors.

  • 3.9% - 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.

  • 3.7% - Yellow Pages Ltd.

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

  • 3.6% - Calian Group Ltd.

    A diversified company that services to the healthcare, training, information technology, engineering and contract manufacturing sectors in Canada and the U.S.

  • 3.5% - Bridgemarq Real Estate Services Inc.

    The company provides services to residential real estate brokers under the Royal LePage, Via Capitale and Johnston & Daniels brands.

  • 3.5% - The North West Company Inc.

    A leading retailer of food and everyday items through 214 stores in rural communities in Canada, Alaska, the South Pacific and the Caribbean.

Outlook

Year to date, large capitalization companies have outperformed small-cap companies as investors fled to safety during the market downturn and the rebound. Most small-cap companies are more domestically focused and are not as geographically diversified as the large-cap companies. Given the significant global equity rally since the late March market low, the Fund remains well positioned with a dividend yield of 4.4%, as of June 30th.

We believe the majority of dividend suspensions and cuts put in place by small-cap companies are now behind us. The Fund remains underweight cyclical stocks (gold/silver/energy/industrials). With the Canadian economy slowly reopening in phases and activity starting to increase, we expect that small-cap company stock performance should begin catching up to the large companies over the next 6-18 months. We expect equity markets to continue their upward trend over the next 12-18 months. However, we would not be surprised to see a market pullback over the next few months as headlines regarding the surge in new COVID-19 cases continue, and U.S. political uncertainty persists. Any pullback should be viewed as a buying opportunity for long-term small-cap investors.

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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.