Despite lagging the S&P/TSX Composite Index, the fund still managed to outpace most of its peers in the first quarter. Much of this outperformance happened in January and February, when its underweight exposure to energy names and foreign holdings helped. However in March, with energy on the rebound and the Canadian dollar rising against the U.S. greenback, the fund lagged its peers.
The portfolio continues to look much different than the benchmark and its peers, with a substantial underweight in financials, real estate, materials and energy. It is overweight in the more defensive sectors such as consumer, healthcare, and utilities. It is also well represented in the technology space.
Despite being managed using a value focused style, the portfolio does not appear to be cheap, with valuation levels looking stretched. If you have held it for a while and have realized some solid gains, you may want to consider rebalancing and taking some profits off the table. Still, for the long term, this continues to be one of my favourite Canadian equity funds.