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Third Quarter Letter 2018

October-25-18

Canadian Equity

For the third quarter of 2018, the Lester Canadian Equity Fund increased by +1.1% net of fees and expenses, versus a drop of -0.6% for the TSX Composite Total Return including dividends. Our outperformance was due to our low weightings in the Energy and Materials sector, a high cash balance, and strong upward moves by several of our small cap holdings. The TSX Energy and Materials sectors were down -8.4% and -13.2% respectively, a sharp reversal from the previous strong quarter. Year-to-date, we are down -1.3% versus +1.4% for the TSX due to having lagged on the upside in the second quarter. Since inception in July 2006, our Canadian equity strategy has produced a cumulative net return of +219%, more than double the +97% for the TSX. This represents an annual compound return of +9.9% per year over 12 years, net of all fees and expenses, versus +5.7% for the TSX Total Return including dividends. Measured in terms of “value added” active net returns, we have generated +4.2% per year over and above the market’s return during this period.