| Fund Company | CI Investments |
|---|---|
| Fund Type | Cdn Small / Mid Cap Equity |
| Rating | A |
| Style | Mid Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| Manager | Greg Dean since August 2012 |
| Stephen Groff since Aug. 2012 | |
| MER | 2.42% |
| Fund Code | CIG 11109 – Front End Units |
| CIG 11159 – DSC Units | |
| Minimum Investment | $500 |
Analysis: This offering is managed by the team of Stephen Groff and Greg Dean, using the same investment process used on other Cambridge managed funds. Their process is driven by a few key beliefs, including a strong commitment to active management, a focus on absolute return and downside protection, and they eat what they cook, meaning each of the managers at Cambridge has a significant portion of their own net worth invested in the funds they manage.
The portfolio is a combination of longer term, higher quality holdings, and more opportunistic names where there is a near term catalyst the managers believe can unlock shareholder value, such as companies that are expected to benefit from a cyclical recovery or an entrenched macro theme.
The investment process uses top down macro analysis to set the sector, geographic, and cap mixture of the fund. Security selection is done on a fundamental, bottom up basis that looks for companies that have a demonstrated history of strong capital allocation, a sustainable competitive advantage, and a management team that is strongly aligned with shareholders. Another interesting aspect of the Cambridge process is they pay attention to the correlation between holdings, which helps to provide better diversification, and helps protect the downside.
This results is a high conviction portfolio, holding around 35 names. Their approach is active, with portfolio turnover averaging well above 100%.
Performance has been excellent, gaining more than 31% for the three years ending March 31, handily outpacing the index and peer group. Their focus on capital preservation has really paid off, with the fund having a negative down capture ratio, meaning that in general, it gained when other small caps were down.
This is a great small and mid-cap focused fund, but don’t look for it to continue to deliver double digit returns going forward. Returns are expected to moderate to more normalized levels. Still, I would expect that over a longer term period, it will be well above average with volatility that is in line or lower than average.