Harbour Advisors Conservative, consistent, and value-driven.
-
Upload
harriet-morrison -
Category
Documents
-
view
215 -
download
0
Transcript of Harbour Advisors Conservative, consistent, and value-driven.
Harbour Advisors
Conservative, consistent, and value-driven
Harbour history
Source: Paltrak, as at August 31, 2014
$35,305
$28,935
Calendar year performance and quartiles 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
CI Harbour 12.3 8.2 -8.6 9.5 26.9 -24.5 6.2 15.2 23.5 15.7 10.6 -0.9 7.3 18.4 14.5 1.7
Average Canadian focused equity 20.9 7.6 -10.2 10.9 26.8 -30.3 1.9 15.4 17.7 12.6 18.8 -10.4 -0.5 14.6 19.3 -2.3
Quartile 4 2 2 4 2 1 1 3 2 2 4 1 1 2 3 2
S&P/TSX Composite Index 13.0 7.2 -8.7 17.6 35.1 -33.0 9.8 17.3 24.1 14.5 26.7 -12.4 -12.6 7.4 31.7 -1.6
Source: Paltrack
Harbour Fund: a long history of outperformance
• Harbour has produced fewer negative return years than the S&P/TSX Composite Index or peer group.
• In years where Harbour was in the third or fourth quartile, the average return was 12.4%.
• Harbour has never been in the third or fourth quartile in a negative return calendar year.
Positive performance stories
Harbour Fund•At an all-time high, all current investors in the fund have made money.
Harbour Global Equity Corporate Class•Beats its peer group since inception and over 1, 3, 5, and 10 years.
Harbour Voyageur Corporate Class•Outperformed the S&P/TSX Composite Index by 23% over the last three years.
Harbour Growth & Income Fund•A new strategic allocation was instituted in January and this fund is now CI’s top-performing balanced fund. It ranked in the first decile in the second quarter of 2014.
Harbour Global Growth & Income Corporate Class•Beat its peer group over 1, 3, and 5 years.
Source: Paltrak, as at August 31, 2014
Conservative, consistent, value-driven
Recipe for attractive long-term returns while reducing risk: Prepare equal parts of: Quality Growth Value
Add: Patience Discipline
Mix all ingredients together to form a Harbour portfolio.
The Harbour team
Stephen Jenkins, CFASenior Portfolio Manager
Phil D’Iorio, CFAPortfolio Manager
Aleksy Wojcik, CFAPortfolio Manager
Greg Chan, CFAInvestment Analyst
Jeremy Rosa, CFAInvestment Analyst
Brandi MiottoExecutive Coordinator
Doug Cooper, CFAPortfolio Manager
Roger MortimerSenior Portfolio Manager
Greg QuickmireAssociate Investment Analyst
The Harbour balanced funds
Harbour Growth & Income FundHarbour Global Growth & Income Corporate Class
What they are•Multi-asset class funds•Derive conservatism from both stock selection and asset allocation
Where they fit•Suitable for clients who want the most conservative exposure to equities
What changes we’ve made•Created a distinct identity•Increased the funds’ relevance•Created a true balance of growth and income
Revised asset allocation – multi-asset approach
The non-equity portion should• Reduce volatility• Introduce the idea of balance• Pay its own way
Revised asset allocation – multi-asset approach
We added return:• From credit, interest rates
and currency• While limiting risk• This is not where we expect to
generate substantial returns.
10%Cash 5%
Government bonds(active)
10%Investment-gradecorporate bonds
(active)
Revised asset allocation – multi-asset approach
Equity yield stocks• Pay bond-like income• Have modest payout ratios• Are less interest rate sensitive• 60% of the fund leads
with income
10%Cash 5%
Government bonds(active)
10%Investment-gradecorporate bonds
(active)
35%Equityyield
Revised asset allocation – multi-asset approach
Growth and income stocks• Balance re-investment with
return of capital• The presence of a dividend
instills management discipline on capital allocation
• Includes classic Harbour names
10%Cash
5%Government bonds
(active)
10%Investment-gradecorporate bonds
(active)
35%Equityyield
35%Growth and
incomeequities
Revised asset allocation – multi-asset approach
Growth stocks• Do not pay a dividend• Have superior
opportunities to reinvest in growth
10%Cash
5%Government bonds
(active)
10%Investment-grade corporate bonds
(active)
35%Equityyield
35%Growth and
incomeequities
5%Growthequities
Revised asset allocation – multi-asset approach
The result:• A spectrum of risk• Balancing income and
growth objectives while seeking to manage volatility
Stock story: Apple
Quality at a discount•Mispriced: 14% free cash flow yield•Bullet-proof balance sheet: $160B in cash•Robust growth: new products, Apple’s ecosystem•Returning $130B to shareholders
Stock story: Canadian Natural Resources
Under-appreciated assets• Enormous land position with
decades of development opportunities• Disciplined management team
invested alongside shareholders • Wall of free cash flow emerging + balance
sheet strength = multiple options • Under-appreciated transition to
long-life assets
Stock story: Discover Financial
An undiscovered business•Prudent management team with shareholder-friendly culture •Superior growth with industry-leading returns•Undervalued payments business•Balance sheet flexibility
1) New leadership taking Hold 2) Harvesting and trimming 3) Seeds planted
AppleBank of Nova ScotiaBarrick GoldBHP BillitonCamecoCanadian Natural ResourcesCenovus EnergyCIBCDiageoDiscover FinancialEmpire Co.George WestonIntact FinancialSuncorUltra Petroleum
• Tim Hortons• PetSmart• Occidental Petroleum• Microsoft• Taiwan Semiconductor
• CN Rail• Intel• BNY Mellon
8 additional starter positions, including:
• CGI Group (Canada)• National Oilwell Varco (U.S.)
Harbour Fund – laying the seeds for growth
Harbour Global Equity Corporate Class – solid portfolio
1) Strong, stable core 2) Harvesting and trimming 3) Seeds planted
Air LiquideAppleAryztaCSX CorpDiageoDiscover Financial GlaxoSmithKlineKerry GroupMichelinNational Oilwell VarcoNidec CorpOccidental Petroleum Owens-IllinoisUltra PetroleumWeir Group
• Aurora Oil & Gas• BHP Billiton• Intel• Mastercard• Microsoft• Taiwan Semiconductor• Treasury Wine Estates
• Atlas Copco• CVS Caremark
10 additional starter positions, including:
• Dollar Tree (U.S.)• Hitachi (Japan)
Harbour Global performance
Harbour Global Equity Corporate Class vs. Morningstar Average Global Equity; Cumulative Returns
Source: Paltrak, as at August 31, 2014
Conclusion
• The Harbour team is committed to producing conservative,
consistent and value-driven portfolios.
• The separation of equity and balanced portfolios has led to
new opportunities.
• The new strategic asset allocation of the growth and income
funds is producing solid results.
• Harbour buys quality, growing companies at large discounts to fair-value.
• The Harbour team is committed to providing conservative, consistent and value-
driven results.
Appendix: Standard performance data
Fund name Year-to-date 1 month 3 month 6 month 1 year 2 year 3 year 4 year 5 year 10 year 15 year
Since inception
Inception date
Harbour Fund Class A 10.1 1.8 6.6 7.5 17.6 12.3 9.3 8.8 7.4 8.0 8.1 7.6 6/27/1997
Harbour Growth & Income Fund Class A 8.5 1.1 4.0 7.0 16.2 11.0 7.6 7.1 6.0 6.2 6.6 5.7 6/27/1997
Harbour Global Equity Corporate Class A Shares 9.4 1.6 1.0 1.7 20.9 20.1 16.2 14.9 11.5 4.8 N/A 3.8 12/31/2001
Harbour Global Growth & Income Corporate Class A Shares 8.1 2.0 2.8 2.1 18.7 17.5 13.8 12.0 9.5 4.4 N/A 4.7 12/23/2002
Harbour Growth & Income Corporate Class A Shares 8.5 1.0 4.0 6.9 16.1 10.9 7.5 7.0 5.9 N/A N/A 3.8 8/1/2006
Harbour Voyageur Corporate Class A Shares 7.5 0.5 1.3 3.3 20.8 16.9 14.7 N/A N/A N/A N/A 13.8 8/2/2011
Source: CI Investments, as at August 31, 2014
Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise indicated and except for returns for periods less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data assume reinvestment of all distributions or dividends and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ®CI Investments, the CI Investments design, Harbour Advisors and Harbour Funds are registered trademarks of CI Investments Inc.
This communication is published by CI as a general source of information and is not intended to provide personal legal, accounting, investment or tax advice. Facts and data provided by CI and other sources are believed to be reliable when posted; however, CI cannot guarantee that they are accurate or complete or that they will be current at all times. CI and its affiliates will not be responsible in any manner for direct, indirect, special or consequential damages howsoever caused, arising out of the use of this presentation.
Thank you
FOR ADVISOR USE ONLY – NOT FOR DISTRIBUTION TO CLIENTS