North American Equity Strategy

Canadian Investors

Overview

The North American Equity Strategy seeks long term capital appreciation by investing in a concentrated group of North American domiciled equities (market cap greater than $1 Billion at purchase). Performance goal to exceed the return MSCI North American and 50% TSX Composite/50% S&P 500 Index.

Investment approach

We employ a bottom up process to develop high conviction portfolios comprised of lasting, high quality companies which exhibit the following characteristics:

  • High returns on capital
  • Defensible business models
  • Industry-leading management teams
  • Strong, consistent free cash flow generation

Comprehensive research

Our subjective evaluation of management teams is a critical step in our process—and has many times proven to be our most effective predictor of future stock performance. Our extensive experience helps us to differentiate between good management teams and exceptional ones. We believe this is absolutely critical to delivering long-term results.

Based on a set of firm-wide values, we believe environmental, social, and governance (ESG) factors are key elements of our long term value to clients. As active investors, we must delve into each companies risk and opportunities, including those related to ESG. We believe that supporting responsible business conduct best protects our client’s capital.

Performance

Annualized Returns

as of December 31, 2021
Laurus North American Composite
QTD
7.0
YTD
32.2
1 Year
32.2
3 Year
23.7
5 Year
18.7
7 Year
17.5
10 Year
16.7
Benchmark Index
QTD
8.6
YTD
26.5
1 Year
26.5
3 Year
20.4
5 Year
13.7
7 Year
12.7
10 Year
14.2

Returns for periods less than one year are not annualized. Data shows past performance and is not indicative of future performance. Current performance may be lower or higher than the data quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Inception date – September 2005.

*Benchmark index is comprised of 50% TSX Composite index plus 50% SP500 Index in CAD. Performance shown is gross of management fees. Periods longer than one year are annualized.

Calendar Returns

as of December 31, 2021
Laurus North American Composite
12/31/2021
32.2
12/31/2020
18.3
12/31/2019
23.0
12/31/2018
-1.8
12/31/2017
28.5
12/31/2016
15.6
12/31/2015
14.9
12/31/2014
21.9
12/31/2013
17.6
12/31/2012
8.7
Benchmark Index
12/31/2021
26.5
12/31/2020
11.3
12/31/2019
24.0
12/31/2018
-2.3
12/31/2017
11.6
12/31/2016
14.7
12/31/2015
5.8
12/31/2014
17.2
12/31/2013
26.5
12/31/2012
10.4

Returns for periods less than one year are not annualized. Data shows past performance and is not indicative of future performance. Current performance may be lower or higher than the data quoted. Investment returns and principal value will fluctuate and shares, when redeemed, may be worth more or less than their original cost. Inception date – September 2005.

*Benchmark index is comprised of 50% TSX Composite index plus 50% SP500 Index in CAD. Performance shown is gross of management fees. Periods longer than one year are annualized.

Attributes

 

Performance:
  • Typically outperforms in flat or falling markets and in volatile market environments;
  • Typically underperforms in rapidly rising or strong speculative markets
  • Less volatility measured by standard deviation than its benchmark
  • Strong downside capture ratio
  • Turnover typically between 14-25%
  • High Active Share / High Tracking Error

 

CHARACTERISTICS:
  • Typical Sector Weights:
    • Overweight: Industrials and Information Technology
    • Underweight: Financials
    • No Weight: Utilities, Energy and Real Estate
  • Concentrated portfolio with 20-30 stocks; typically, 25
  • Buy Range: greater than $1 billion
  • Capacity evaluated at $6 billion; Hard Close at $7 billion
  • Benchmark Agnostic

For more information on the strategy please see our quarterly factsheet.
* Source: eVestment alliance in the eVestment North American All Cap Core universe

Laurus Investment Counsel (“Laurus” or the “Firm”) is an independent investment management firm established in 2014 with a head office in Toronto, Ontario. Laurus is registered as a Portfolio Manager in most provinces in Canada and an Investment Adviser with the SEC. Our investment philosophy and proprietary, systematic process is based on fundamental equity analysis of world-class smaller companies. Today we manage a variety of specialized equity portfolios across a variety of capitalization bands for institutional and individual investors.

The Laurus North American Equity Composite inception was July 2007 and create date was April 2014 and represents an equity strategy managed in Canadian Dollars that utilizes a value approach to invest investing in a concentrated group of North American domiciled equities (market cap greater than $1 Billion at purchase). This composite has a minimum account size of $5 million.

50% TSX Composite/50% S&P 500 Index is comprised of 50% of the S&P/TSX Composite Index is the benchmark Canadian index, representing roughly 70% of the total market capitalization on the Toronto Stock Exchange with about 250 companies included in it. The Toronto Stock Exchange is made up of over 1,500 companies and 50% of the S&P 500, a free-float weighted measurement stock market index of 500 of the largest companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices.

The standard management fee schedule currently in effect is as follows: 0.75% for the first $10 million; 0.50% on the next $15million; 0.40% on the next $17.5 million; 0.35% on the balance. Actual management fees charged may vary depending on applicable fee schedules and portfolio size, among other things. Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request. Past performance is no guarantee of future results. Results will vary among accounts. The Canadian dollar is the currency used to express performance. Gross returns are gross of management fees, custodial fees and withholding taxes but net of all transaction costs. Composite net returns have been calculated by taking the highest management fee in effect for the respective period from the gross composite returns.

A list of composite descriptions and limited distribution pooled funds descriptions are available upon request. For all periods with 6 accounts or less do not present a measure of internal dispersion or the number of accounts included for the year.

Laurus Investment Counsel claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Laurus Investment Counsel has been independently verified for the periods September 1, 2005 until December 31, 2020. The verification report(s) is/are available upon request.

A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

GIPS Disclosures

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EMAIL
info@lauruscounsel.com

TOLL FREE
844-430-5501 (toll-free)

VISIT
161 Bay Street, Suite 3950
Toronto, Ontario M5J 2S1

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