Caldwell Investments Management Ltd. announces its first soft close of the successful Canadian Value Momentum Fund, which has grown from $40 million at the start of COVID to almost $230 million today, the fund manager told Wealth Professional.
Jennifer Radman, a senior portfolio manager and Caldwell’s Head of Investments says they are proud to cap the fund and still maintain the ability to continue adding value to investors.
“That’s not necessarily an easy business decision, to stop that when you have very strong momentum, in terms of money going into the fund. This is a very competitive industry. Fees are so low that essentially every new dollar of assets coming in is very profitable because it’s a fixed expense space. So, it would be very easy to say, ‘hey, look how great the strategy has done’ and just continue to grow, grow, grow. But, the problem with that is you start eroding the power of the investment strategy just because there’s not a ton of liquidity in the Canadian market. So, we’re very proud that, as an organization, we have put investors first. That was really the motivation for capping the fund,” she explained.
The fund identifies stocks in the Canadian market where the price is increasing and what’s driving that and, once it plays out, Caldwell Investment Management actively trades it. “In 2020, the turnover was over 200%,” said Radman. Further, she attributes the fund’s success to the fact it was a good compliment to other funds. Its ten-year track record was also strong. “The COVID environment just helped us demonstrate how the strategy works in a very turbulent time,” explained Radman.
“Nobody needs another billion dollar Canadian equity fund,” she said. So, Caldwell opted for a soft close so investment advisors who are discretionary portfolio managers can continue to use it while Caldwell slows the fund’s asset growth.
About Caldwell Investment Management Ltd.
Founded back in 1990, Caldwell Investment Management Ltd. is a Toronto-based firm providing investment management services to pooled and mutual funds. Over the years, the firm has established and maintained its reputation for excellence in the investment management industry, providing innovative investment solutions to meet the requirements of individual and institutional investors. In this regard, Caldwell was awarded the FundGrade A+ Award for the year 2018 in respect of the Caldwell Canadian Value Momentum Fund.
Caldwell is known for having considerable expertise in the management of dividend-paying equity mandates. This is with a particular emphasis on funds focused on issuers domiciled in Canada and the U.S., consistent with the investment approach employed by the GDF Fund over the past several years.
For further info about the Caldwell team, visit their LinkedIn profile.
