Vancouver-based Alpha Delta Management Corp. is looking to take mutual funds back to the basics of active management with a new family of three mutual funds launched on Thursday.
“These are pure investment managers, these are pure investors that are constructing very simple, very transparent portfolios with time tested processes that have worked for years and years and years,” says Victor Therrien, CEO AlphaDelta.
The three funds are all concentrated in nature, holding only 30 to 50 companies. They were created to counter what Therrien sees as the growing proliferation of overly complicated mutual funds and exchange-traded funds (ETF), which are dependent on computer algorithms.
All three funds are managed by Vancouver-based Qwest Investment Management Corp., which launched in 2005 and is an affiliated partner of AlphaDelta, and sub-advised by other investment managers. All three funds have a management expense ratio (MER) cap of 2.75%.
AlphaDelta Canadian Prosperity Class fund is a small-cap fund focused on Canadian companies with a market capitalization between $1 billion and $3 billion. The fund is managed by Laurus Investment Counsel Inc. and is available in two packages: Series A, with a 2.5% management fee; and Series F at 1.5%.
AlphaDelta Global Value Class Fund focuses on large-cap companies outside of Canada and is managed by Neosho Capital LLC. Management fees are: Series A, 2.5%, and Series F, 1.5%.
The third fund, AlphaDelta Growth of Dividend Income Class Fund, follows the belief of its portfolio manager, John Schmitz, a professor at Western University, that if a portfolio’s income isn’t growing it will not keep up with inflation thereby significantly eroding the investor’s capital. As such, the fund invests in large-cap global companies that have a long track record of increasing their dividends on an annual basis. “We believe we are creating a new investment mandate within Canada,” says Therrien.
The fund also employs an option selling strategy. SciVest Capital Management Inc. manages the fund. Management fees are: Series A, 1.3%; and Series F, 0.8%.
While this is the first fund launch for AlphaDelta, which was founded in 2014, Therrien is no stranger to the creation and distribution of mutual funds.
In 1994, he worked at 20/20 Funds Inc. Following AGF Management Inc.’s purchase of 20/20 Funds, Therrien brought San Diego-based Brandes Investments Partners LP to Canada in 1997 and later helped with the launch of the Toronto-based Brandes Investment Partners & Co. Canada (now Bridgehouse Asset Managers) in 2001.