Terry Thib MBA, CFA, PEng, MESc
VP, Investments
Portfolio Manager
  • 14 years of investment experience
  • Selected TopGun Investment Mind for 2012, 2014, 2015/2016 and 2017
  • Supported by two associate portfolio managers with 26 years of combined experience

Two funds managed by Terry Thib – IA Clarington North American Opportunities Class and IA Clarington Growth & Income Fund – just marked their third anniversary, and there is much to celebrate. The funds have overall Morningstar ratings of four and five stars1, respectively, which reflect their impressive risk-adjusted performance compared to peer groups.

  1-year return 2-year return 3-year return Since Inception 3-year standard deviation 3-year Sharpe ratio 3-year upcapture ratio (%) 3-year downcapture ratio (%)
IA Clarington North American Opportunities Class, Series F 9.2 11.0 8.5 8.5 7.7 1.0 76.1 68.4
Peer group: Canadian Focused Small/Mid Cap Equity 9.5 12.0 6.8 6.8 9.9 0.7   
Quartile rankings 2 3 2 2     
        
IA Clarington Growth & Income Fund, Series F 6.1 12.1 8.1 8.1 5.71.375.851.0
Peer group: Canadian Equity Balanced 6.9 9.4 5.5 5.5 6.20.8  
Quartile rankings 3 1 1 1     

Source: Morningstar, as at December 31, 2017. Inception date: December 22, 2014. Capture ratios are based on the funds’ respective bechmarks: 50% S&P/TSX Composite Index, 50% S&P 1500 Index for IA Clarington North American Opportunities Class Series F; 30% Credit Suisse Leveraged Loan Index, 35% S&P/TSX Composite Index and 35% S&P 1500 Index for IA Clarington Growth & Income Fund Series F. Peer groups are based on Morningstar categories for the respective funds.


Growth of $10,000

Source: Morningstar Direct, as at December 31, 2017. Inception date: December 22, 2014. *The Peer group is the Canadian Focused Small/Mid Cap Equity Morningstar category.

Growth of $10,000

Source: Morningstar Direct, as at December 31, 2017. Inception date: December 22, 2014. *The Peer group is the Canadian Equity Balanced Morningstar category.



TWO UNIQUE MANDATES

Terry’s unique, difficult-to-replicate approach assesses opportunities across the full market-cap spectrum. He tends to focus on assets that are less widely known by the broader market and, in some cases, much less efficient than the securities to be found in a typical portfolio. Terry’s high-conviction, actively managed funds include holdings in small- and mid-cap stocks, senior loans, high-yield bonds and options (covered calls and written puts), making them a differentiated source of value for a wide range of investors.

As the charts below make clear, adding Terry’s funds to traditional balanced portfolios has delivered enhanced risk-adjusted returns over the past three years and offers potential for attractive long-term outcomes.


Adding IA Clarington North American Opportunities Class2



For illustrative purposes only. Sharpe ratio measures excess return over a risk-free rate divided by standard deviation (volatility). Sortino ratio measures excess return over a
risk-free rate divided by downside deviation (downside volatility).



Adding IA Clarington Growth & Income Fund3



For illustrative purposes only.




WHY NOW?

Terry expects the synchronized global economic recovery to continue through 2018, which bodes well for corporate earnings and, in turn, equity prices. However, with many sectors and markets becoming more expensive, combined with the anticipated withdrawal of central bank liquidity, the difference between winners and losers is likely to become more pronounced, offering a clear advantage for Terry’s active, benchmark-agnostic approach.

The below table provides a snapshot of how Terry’s security selection decisions create significant upside potential for IA Clarington North American Opportunities Class and the equity component of IA Clarington Growth & Income Fund.


IA Clarington North American Opportunities Class (as at December 31, 2017)

Company Current valuation Catalyst % upside Fund weighting Portfolio impact
Geodrill Ltd. EV/EBITDA ('18) 2.8x Dividend, share buybacks, discovered by market 140% 2.10% 294 bps
Intertain Group Ltd. EV/EBITDA ('18) 4.1x Reduction in leverage 130% 1.70% 221 bps
DIRTT Environmental Solutions EV/EBITDA ('18) 8.1x Continued earnings momentum, margin expansion 90% 1.75% 158 bps
IA Clarington Growth & Income Fund (as at December 31, 2017)

Company Current valuation Catalyst % upside Fund weighting Portfolio impact
Tricon Capital Group EV/EBITDA ('18) 6.6x Simplification of business, further acquisitions 160% 2.10% 336 bps
Sir Royalty Income Fund EV/EBITDA ('18) 7.2x New restaurant openings, AB recovery, renovations 60% 1.20%72 bps
Crius Energy Trust EV/EBITDA ('18) 3.9x Integration of acquisition, solar growth 40% 1.50% 60 bps

Source: Bloomberg and IA Clarington Investments Inc. % upside is based on the portfolio manager’s fair valuation estimates.


In an environment of rising yields and monetary policy normalization, fixed-income investing remains challenging for traditional bondholders. To reduce interest rate sensitivity, the fixed-income component of IA Clarington Growth & Income Fund has a low duration compared to typical investment grade fixed income.

For more information about the funds managed by Terry Thib, speak with your iA Clarington sales representative or visit iaclarington.com



FUND CODES

IA Clarington North American Opportunities Class

Series Front Back Low Series Fee-based
A $CDN1250 1251 1252 F $CDN 1258
E $CDN 1260 EF $CDN 3229
Purchase Options Front Back Low Purchase Options Fee-based
A $U.S.1264 1265 1266 F $U.S. 1272
E $U.S. 1274   
IA Clarington Growth & Income Fund

Series Front Back Low Series Fee-based
A $CDN1140 1141 1252 F $CDN 1258
E $CDN 1150 F5 $CDN3229
E5 $CDN1151 EF $CDN 3217
T5 $CDN1143 1144 1145 EF5 $CDN 3218
Purchase Options Front Back Low Purchase Options Fee-based
A $U.S.1155 1156 1157 F $U.S. 1163
E $U.S. 1165 F5 $U.S.1164
E5 $U.S.1166   
T5 $U.S.1158 1159 1160   

1Morningstar ratings are for IA Clarington North American Opportunities Fund, Series F and IA Clarington Growth & Income Fund, Series F. Morningstar Ratings are based on fund returns for periods ending December 31, 2017, and are subject to change monthly. Morningstar Star Ratings are assigned based on the ranked Morningstar Risk-Adjusted Return of each fund compared to other funds in the same Morningstar Category. As at December 31, 2017, there were 133 funds with at least a 3-year performance history in the Canadian Equity Balanced Morningstar category and 423 funds in the Canadian Focused Small/Mid Cap Equity Morningstar category. Morningstar calculates ratings for the three-, five- and ten-year periods and then the Overall Morningstar Rating is based on a weighted average of Morningstar Ratings for available time periods. Morningstar calculates ratings for categories with at least five funds. If a fund scores in the top 10% of its category, it receives five stars; if it falls in the next 22.5%, it receives four stars; the next 35% earns a fund three stars; those in the next 22.5% receive two stars; and the lowest 10% receive one star. For greater detail, see morningstar.ca. 2Morningstar Direct, as at December 31, 2017. Return figures are annualized and all figures are since inception of IA Clarington North American Opportunities Class, Series F (12/22/2014). A blend of 35% S&P/TSX Canadian Dividend Aristocrats Total Return index, 35 S&P/TSX Composite Total Return index and 30 iShares Core Canadian Universe Bond ETF was used to represent 100% of the core portfolio. A blend of 30% S&P/TSX Canadian Dividend Aristocrats Total Return index, 30 S&P/TSX Composite Total Return index and 25% iShares Core Canadian Universe Bond ETF was used to represent 85% of the core portfolio. The performance data comparison presented is intended to illustrate the Fund’s historical performance as compared with historical performance of a theoretical core portfolio made up widely quoted market indices and the iShares Core Canadian Universe Bond Index ETF. There are various important differences that may exist between the Fund and the stated indices/ETF that may affect the performance of each. The core portfolio is a blend of S&P/TSX Composite Index (35%), S&P/TSX Canadian Dividend Aristocrats Total Return Index (35%) and the iShares Core Canadian Universe Bond Index ETF (30%). The S&P/TSX Composite Index is the premier indicator of market activity for Canadian equity markets, with 95% coverage of Canadian-based, TSX-listed companies. The index includes common stock and income trust units and is designed to offer the representation of a broad benchmark index while maintaining the liquidity characteristics of narrower indices. The S&P/TSX Canadian Dividend Aristocrats Total Return Index measures the performance of companies included in the S&P/TSX Composite Index that have a market capitalization of at least C$300 Million, have followed a policy of consistently increasing dividends every year for at least five years. The company's security must be a common stock or an income trust listed on Toronto Stock Exchange. The iShares Core Canadian Universe Bond Index ETF seeks to provide income by replicating, to the extent possible, the performance of the TSE TMX Canada Universe Bond Index (the “Index”), net of expenses. Under normal market conditions, the fund will primarily invest in Canadian fixed income securities. The Index is a market capitalization-weighted index consisting of a broadly diversified range which may include any or all of federal, provincial, corporate and municipal bonds. The investment strategy of the fund is to invest in a regularly rebalanced portfolio of bonds, selected by BlackRock from time to time, that closely matches the characteristics of the Index. The performance comparison is for illustrative purposes only and does not imply future performance. SMID = Small and Mid-Cap equities. 3Morningstar Direct, as at December 31, 2017. Return figures are annualized and all figures are since inception of IA Clarington Growth & Income Fund, Series F (12/22/2014). SMID = Small and Mid-Cap equities. SSL= Senior Secured Loans. Commentaries are provided by the portfolio manager or sub-advisor responsible for the management of the fund’s investment portfolio, as specified in the applicable fund’s prospectus (“portfolio manager”). Statements by the portfolio manager represent their professional opinion, do not necessarily reflect the views of iA Clarington, and should not be relied upon for any other purpose. Information presented should not be considered a recommendation to buy or sell a particular security. Specific securities discussed are for illustrative purposes only. Mutual funds may purchase and sell securities at any time and securities held by a fund may increase or decrease in value. Past investment performance of a mutual fund or individual security may not be repeated. The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decision. The historical risk level of the stated fund, index or peer group category is based on the standard deviation of its investment returns. The use of standard deviation as a measurement tool allows for a reliable and consistent quantitative comparison of historical relative volatility and related risk. Standard deviation is widely used to measure volatility of return and represents the historical level of volatility in returns over set measurement periods. A lower standard deviation means the returns have historically been less volatile and vice-versa. Historical volatility may not be indicative of future volatility. There are other types of risks associated with the investments presented. Please read each fund's prospectus for further information on the specific risks related to the fund. Statements that pertain to the future represent the portfolio manager’s current view regarding future events. Actual future events may differ. iA Clarington does not undertake any obligation to update the information provided herein. Trademarks displayed herein that are not owned by Industrial Alliance Insurance and Financial Services Inc. are the property of and trademarked by the corresponding company and are used for illustrative purposes only. The iA Clarington Funds are managed by IA Clarington Investments Inc. iA Clarington and the iA Clarington logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under license.