AlphaDelta Funds > Canadian Momentum Equity Class Fund

Canadian Momentum Equity Class Fund

The AlphaDelta Canadian Momentum Equity Class Fund is an actively managed fund investing 50% to 90% of its portfolio in Canadian equities.

Investment Objectives

The fundamental investment objective of the Fund is to provide long-term capital appreciation by investing primarily in equity securities of Canadian and foreign companies.

Any change in the fundamental investment objective of the Fund must be approved by a majority of the votes cast at a meeting of the Fund’s shareholders called for that purpose. However, the investment strategies described below may be changed by the Manager in its discretion.

SeriesClosing price*$ daily change% daily change
A$11.62$0.141.22%
F$12.22$0.151.22%
G$13.61$0.161.22%

* As of November 13, 2019.  Note: Calculated and posted by Qwest Investment Fund Management Ltd.

SeriesInception date12-Mth Dist’n Yield**6 Month1 Year2 Year2019 Ytd2018 YearSince InceptionStandard DeviationActive Share***
F28-Feb-150.7%-3.5%5.7%1.6%12.5%-8.0%5.3%11.3%88.7%
A28-Feb-150.7%-4.1%4.5%0.5%11.4%-9.0%4.2%11.3%88.7%

*As of Oct. 31, 2019

The returns shown above are annualized compound returns, calculated on a money weighted basis, net of all fund-level fees and expenses.  The returns assume a reinvestment of all fund distributions and do not take into account sales, redemption, distribution or optional charges or income taxes.  These historic returns are provided for general information purposes only and may not be indicative of the future returns.

SeriesIncomeCapital gainsTotal
A$0.0000$0.0000$0.0000
F$0.0000$0.0000$0.0000
I$0.0000$0.0000$0.0000

Investment Strategy

The Fund invests primarily in equity securities (including securities of unit trusts, real estate investment trusts and depository receipts) of Canadian and foreign companies. The Fund will invest its portfolio such that it generally falls within the Canadian Focused Equity investment strategy category. As such, the Fund generally invests at least 50%, and less than 90%, of its equity portfolio in securities domiciled in Canada. The Fund will invest no more than 49% of its equity portfolio in foreign securities, with the majority of these foreign securities expected to be domiciled in the United States. In addition, the weighted average market capitalization of the Fund’s equity portfolio is generally considered mid to large capitalization (i.e., weighted average market capitalization greater than $5 billion), although the Fund may hold some smaller capitalization equities.

The Fund’s portfolio advisor will implement a disciplined, price momentum (or relative strength) investment strategy. As such, the Fund will invest in Canadian equities that have been performing well over the medium-term relative to other Canadian equities. Similarly, for its foreign holdings, the Fund will invest in foreign equities that have been performing well over the medium-term relative to other foreign equities within the same foreign market.

To maintain discipline and consistency, the portfolio advisor will generally use a quantitative model to define relative strength and to implement the Fund’s relative strength strategy using strict buy, sell and portfolio rebalancing rules (overall, the “Momentum Model”). That is, the portfolio advisor’s Momentum Model will dictate equity purchase and sale decisions to be implemented by the portfolio advisor on behalf of the Fund. The Momentum Model will also dictate the rebalancing rules and weights of the equities within the Fund. The underlying principles of the Momentum Model will be the same across all countries; however, the details of the Momentum Model may differ in minor respects for different countries reflecting differences in the market structure and trading of each country.

While the Momentum Model and its parameters will change infrequently through time, the Momentum Model will be subject to periodic updating and improvement as new research or experience demonstrates that improvements to the Momentum Model and/or the overall investment strategy can be reasonably expected by the portfolio advisor to be achieved. These periodic changes to the Momentum Model and its parameters are expected by the portfolio advisor to be infrequent and generally marginal, as disciplined and consistent replication of the price momentum strategy is deemed by the portfolio advisor to be one of the keys to its long-term success.

 

Investor Suitability

This Fund is suitable for investors who are:

  •   Seeking long-term capital growth;
  •   not concerned with short term price fluctuations;
  •   planning to hold their investments for the long term; and
  •   willing to accept medium risk.

 

The Manager determined the appropriate level of investor risk tolerance that would be appropriate for investment in this Fund by following the Investment Risk Classification Methodology set out in National Instrument 81-102 Investment Funds for the fund type of the Fund.

 

Portfolio Manager

 

DR. JOHN J. SCHMITZ PH.D., CFA

SCIVEST CAPITAL

Dr. John Schmitz has been professionally managing global equity and equity derivative investment portfolios for almost 20 years, and prior to that he acted as a consultant to investment firms and funds.Dr. Schmitz’s expertise is the portfolio management of global equities and global equity derivatives using both highly sophisticated quantitative models as well as traditional fundamental methods. Currently, Dr. Schmitz’s professional focus is on his firm’s global common equity, growth of dividends, investment strategy which is often implemented with an options writing income generating overlay.Dr. Schmitz holds a BESc (Mechanical Engineering), a BA (Economics) and a DHS (Honors Economics) from the University of Western Ontario, a MA (Economics) from the University of Toronto, and a PhD (Finance) from the Richard Ivey School of Business at the University of Western Ontario. He also holds the Chartered Financial Analyst (CFA) designation.

What Does The Fund Invest In?

The portfolio advisor expects that the Fund’s investment portfolio will be reasonably well diversified by individual holdings and sectors, to the extent possible given its price momentum focused investment strategy. The portfolio advisor expects the Fund to hold 20 to 40 securities of issuers listed on Canadian stock exchanges, along with 10 to 40 securities of issuers listed on foreign stock exchanges. As a Canadian focused equity strategy, the weights of the Canadian listed equities are expected to be significantly larger than the weights of the foreign listed equities. While the weights of individual equity securities will generally not exceed 8% of the net asset value of the Fund immediately following the Fund’s regularly scheduled (generally monthly) portfolio rebalancing, should an individual security weight grow to exceed 12% of the net asset value of the Fund between regularly scheduled portfolio rebalancings, then the portfolio advisor will trim such holding back to no more than 8% of the net asset value of the Fund. To ensure a degree of sector diversification, sector exposures will generally not exceed 50% and industry exposures will generally not exceed 30% of the net asset value of the Fund immediately following the Fund’s regularly scheduled portfolio rebalancing.

The Momentum Model also contains a risk management component whereby the Fund may hold a varying portion of its assets in cash or short-term money market securities (including ETFs holding such securities) when the Momentum Model signals that momentum returns are excessively volatile and/or risky. That is, when momentum returns are deemed excessively volatile and/or risky, then the Fund will hold more cash or short-term money market securities with the proportion therein increasing with the relative degree of volatility risk.

While the Momentum Model will determine purchases and continued holdings of the Fund, the portfolio advisor may at its discretion over-ride the Momentum Model and either not purchase a new recommended holding and/or sell an existing holding, if the portfolio advisor views in its professional judgement that a Momentum Model recommended purchase or current holding to be excessively risky and/or not consistent with the relative strength mandate of the Fund. On the other hand, the portfolio advisor will not add positions to the Fund that have not been recommended by the Momentum Model.

The Fund may, at times, engage in short selling for up to 20% of its Net Asset Value. The Fund’s portfolio advisor will implement the same disciplined, quantitative model driven, price momentum (or relative strength) investment strategy on the short side of the portfolio as on the long side of the portfolio, except that the Fund will be short selling the poorest relative performing equities within in the market.

The portfolio advisor may, at times, use derivatives within the Fund for hedging purposes. The portfolio advisor may use over-the-counter forward or swap contracts and/or listed futures contracts to hedge some or all of the foreign currency exposures inherent in the Fund’s foreign holdings. The portfolio advisor may vary the amount of foreign currency hedging within the Fund through time depending upon the portfolio advisor’s view of the net risks, costs and opportunities of such currency hedging. The portfolio advisor may also use listed equity options on exchange traded funds to hedge the Fund’s equity market exposure in adverse market conditions (for example, buying put options on index ETFs and/or selling call options on index ETFs). In all cases, the derivative strategies implemented by the Fund will be consistent with National Instrument 81-102 – Investment Funds and the Fund will only use derivatives as permitted by Canadian securities regulators.

In addition to the Momentum Model risk management component, the Fund may hold a portion of its assets in cash or short-term money market securities (including ETFs) while seeking investment opportunities, for liquidity purposes, for cash coverage against short sales, written put options, and/or for defensive purposes to reflect adverse market, economic, political or other conditions

Fund Characteristics

Fund SeriesFundServ CodesMgmt FeeTrailer FeeCurrent Admin Fee – Fee CapProjected Approx. MER w/ Current CapMinimum Initial InvestmentMinimum Additional InvestmentCIFSC Strategy Category (Risk Rating)
Series AQWE 4211.70%1.00%0.60%2.60%$1,000$100Canadian Focused Equity (Medium)
Series F1QWE 4220.70%0.60%1.60%$1,000$100
Series G2QWE 4240.35%0.60%1.20%$25,000$100
Series HQWE 4251.35%1.00%0.60%2.20%$25,000$100

1 The Series F funds are intended for Dealer Fee Based Account Investors only.
2 The Series G funds are intended for Portfolio Managers. Contact AlphaDelta for details.

DISCLOSURES

The information provided herein is for general information purposes only and is not intended to be a solicitation for the purchase of fund units.

 

Important information regarding the fund is set out the simplified prospectus and in other documents made publicly available, which should be reviewed prior to investment.  The returns shown above are annualized compound returns, calculated on a money weighted basis, net of all fund-level fees and expenses.  The returns assume a reinvestment of all fund distributions and do not take into account sales, redemption, distribution or optional charges or income taxes.  These historic returns are provided for general information purposes only and may not be indicative of the future returns.”

 

Qwest Investment Fund Management Ltd. Is the Investment Fund Manager of the fund. Qwest Investment Fund Management Ltd is a Portfolio Manager, Investment Fund Manager and Exempt Market Dealer registered in the provinces of Alberta, British Columbia, Nova Scotia, Quebec, Saskatchewan and Ontario.  The firm is also registered solely as an IFM in the provinces of Newfoundland.

Manager commentaries provided above have been obtained from third party managers and do not necessarily reflect views of AlphaDelta.  AlphaDelta has not taken any steps to verify the accuracy or completeness of the information presented herein.