This year has brought about the largest economic shock in modern history as well as the largest stimulus response in history. Cambridge Canadian Equity Fund began the year with a cyclical bias, but as the pandemic gained ground, we began reducing our investment in the energy sector and cyclical exposure.
Brandon Snow's blog
Over the last three years, the performance of the Cambridge Canadian Equity Fund has not met clients’ expectations, and rightfully so. After an excellent five years from inception, the last three have been subpar (third quartile to be exact).
By Brandon Snow, Principal and Chief Investment Officer – As I write this update to my last blog, there are tentative signs that the COVID-19 virus is plateauing, with the increase in new infections no longer following an exponential curve. However, while market volatility has calmed down, it is still elevated.
We have had unprecedented moves in many markets over the last few weeks, and it’s important to remember unprecedented things happen in the market over and over again. While this situation is unique, the market behavior is not unusual.
Happy 2020! As we embark on a new decade, I recently wrote a blog on my review of 2019 and outlook for this year.
2019 has been a successful year for investors by all accounts. As of the end of November, the Toronto Stock Exchange is up 22.28%, S&P 500 Index up 27.63% and Financial Times Stock Exchange Canada Universe Overall Bond Index is up 7.79%. This is an arbitrary end point, as there was tremendous trepidation at the end of 2018, where we saw markets correct by more than 15%1 in December 2018, which gave Cambridge a great opportunity to put capital to work for clients. For Cambridge, 2019 represented a year of growth and evolution towards our goal of adding value to clients through investment excellence and improved client service.
Over the past six months or so, energy has become a much larger weight in our Canadian Equity portfolios. Using charts from a data visualization software that we use at Cambridge Global Asset Management (“Cambridge”), I want to describe what has attracted us to find good value in the energy sector and how and why we have built our exposure in this sector.
One of the most important questions in an investment process – whether you’re viewing it from an asset allocation, position sizing or stock picking perspective – must be: what are you trying to achieve?