As iA Clarington's longest sub-advisory relationship, QV Investors (QV) has managed the IA Clarington Canadian Small Cap Fund since its inception on March 20, 1997.

For 20 years, QV’s proven investment philosophy has delivered excellent results for investors seeking capital appreciation with reduced risk.

Conference call replay with QV Investors
(For advisors only)
(recorded on April 26, 2017)

Portfolio manager Ian Cooke provided his outlook and positioning.

Encore dial-in details:855-859-2056
Conference passcode: 98527932

Two decades of outstanding performance

The IA Clarington Canadian Small Cap Fund has had a tremendous 20 years (10.3% annualized return over 20 years), outperforming the BMO Small Cap Index, the S&P/TSX Composite Index and the Morningstar Canadian Small/Mid Cap Equity Category.

20-year growth of $100,000

Chart

Source: Zephyr StyleADVISOR as at March 31, 2017.

“Through disciplined, risk-conscious investing in fundamentally sound businesses, we have been able to achieve exceptional results over the long term.”

Ian Cooke
Portfolio Manager, QV Investors

Actively reducing volatility

The IA Clarington Canadian Small Cap Fund has not only delivered better returns than key benchmarks, it has done so with less volatility.

Standard deviationIA Clarington Canadian Small Cap Fund, Series AS&P/TSX Composite IndexMorningstar Small/Mid Cap CategoryBMO Small Cap Index
5-year8.18.19.113.5
10-year12.713.514.719.0
15-year12.112.713.817.6
20-year13.514.915.018.3

Source: Zephyr StyleADVISOR as at March 31, 2017.

A focus on high-quality, well-managed businesses, which tend to be more resilient during uncertain times, has allowed the IA Clarington Canadian Small Cap Fund to outperform the market in difficult years.

Protecting gains through reduced downside

For the 20-year period since the Fund’s inception, the IA Clarington Canadian Small Cap Fund captured only 52.7% of the downside experienced by the BMO Small Cap Index and only 59.1% of the downside experienced by the broader S&P/TSX Composite Index during negative monthly periods.

Upside / Downside vs. BMO Small Cap Index

Chart

Upside / Downside vs. S&P/TSX Composite Index

Chart

Source: Zephyr StyleADVISOR as at March 31, 2017.

“QV’s outstanding record in managing the IA Clarington Canadian Small Cap Fund is a shining example of the value that active management can bring to investors.”

Eric Frape
Senior Vice-President, Product & Investments
iA Clarington Investments

A perennial outperformer

Rolling returns show that regardless of when an investment in the IA Clarington Canadian Small Cap Fund was made, over a 15-year period the Fund outperformed the S&P/TSX Composite Index, the BMO Small Cap Index and the Morningstar Canadian Small/Mid Cap Equity Category 100% of the time (61 periods).

IA Clarington Canadian Small Cap Fund (Series A)Outperformance frequency vs. S&P/TSX composite Index Outperformance frequency vs. BMO Small Cap IndexOutperformance frequency vs. Morningstar Small/Mid Cap Category
5-year rolling return72%78%81%
10-year rolling return100%98%100%
15-year rolling return100%100%100%

Source: Zephyr StyleADVISOR as at March 31, 2017.

About QV Investors

  • QV is an independent, employee-owned, Calgary-based investment manager founded in 1996 on the principles of Quality and Value
  • The personal investment portfolios of all QV employees must be 100% invested alongside QV clients in QV funds

Investment process

  • Fundamental, bottom-up, value approach
  • Concentrated fund with 25-40 holdings
  • Emphasis on long-term investments in well-managed companies
  • Risk-conscious approach seeks to limit potential losses through a sector maximum of 25% and an individual holding maximum of 6%

To be included in the portfolio, a security must meet stringent standards for each of seven risk-management criteria: management, financial record, franchise, balance sheet, valuation, dividends and portfolio enhancement.

The portfolio is then consistently monitored to ensure that the Fund continues to adhere to its discipline and mandate.

QV

Download the 20th anniversary brochure

Download

 Click here for more information on the IA Clarington Small Cap Fund.

The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decision. 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 security may not be repeated. 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.Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. 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 the prospectus for further information on the specific risks related to each Fund. The performance data comparison presented is intended to illustrate the Fund’s historical performance as compared with historical performance of widely quoted market indices. Actual Fund performance: 1 yr. 15.7%; 3 yr. 4.1%; 5 yr. 12.2%; 10 yr. 7.3%. BMO Small Cap Index performance: 1 yr. 29.8%; 3 yr. 3.4%; 5 yr. 4.3%; 10 yr. 3.6%. S&P/TSX Composite Index performance: 1 yr. 18.6%; 3 yr. 5.8%; 5 yr. 7.8%; 10 yr. 4.7%. Canadian Small/Mid Cap Equity category performance: 1 yr. 17.1%; 3 yr. 3.1%; 5 yr. 6.5%; 10 yr. 4.0%. The Morningstar Canadian Small/Mid Cap Equity category was created by CIFSC. There are 110 funds in the category. To qualify funds must invest at least 90% of their equity holdings in securities domiciled in Canada, and their average market capitalization must be lower than the Canadian small/mid cap threshold. There are various important differences that may exist between the Fund and the stated indices that may affect the performance of each. 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 BMO Nesbitt Burns Small Cap Index includes common shares of all Canadian companies trading on the Toronto and Montreal Stock Exchanges with a total capitalization at the beginning of each month which does not exceed 0.1% of the total capitalization of the S&P/TSX Index. The Fund’s market capitalization, geographic, and sector exposure may differ from that of the benchmark. The Fund’s currency risk exposure may be different than that of the benchmark. The Fund may hold cash while the benchmark does not. It is not possible to invest directly in market indices. The performance comparison is for illustrative purposes only and does not imply future performance. Effective June 5, 2009, IA Clarington Canadian Opportunities Fund merged into this Fund.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.