U.S.

PADIS

PORTFOLIO

September 30th 2019

Portfolio

Advised

D isciplined

Investment

Strategies

OVERVIEW

FIRM

Echelon Wealth Partners is a full service independent Canadian based brokerage house with

offices in Toronto, Montreal and across Canada. Fidelity acts as their custodian and clearing

agents.

$5 Billion in Assets Under Managements – with over 80 Investment Advisors.

• Portfolio Management

• Capital Markets

• Equity Research

• FX Strategies

• Cash Management

• Financial Planning

• Insurance

CAPABILITIES

EXPERIENCED TEAM

As part of the retail division, the PADIS team of portfolio managers have almost 40 years of

combined experience in the industry.

EXECUTIVE SUMMARY

PADIS’ ROOTS

Passive investment strategies have experienced widespread adoption over the years with their inflows

now dwarfing many active strategies. This increase in size has allowed for the costs associated with these

strategies to continually drop, but it has also magnified other problems such as the herd instinct

amplifying losses when the markets are falling.

Recognizing this problem and other emotional based investing biases, over 5 years ago we began

looking for a solution and thus began the PADIS Portfolios.

The solution stems from rigorous research as to which factors and attributes are found in companies

with the potential to outperform and from which can be built a better portfolio. These portfolios protect

clients from large drawdowns while still generating strong performance over a complete business cycle.

In the following pages we explain in detail our investment process and the factors used in managing

client portfolios.

EXECUTIVE SUMMARY

PADIS

The U.S. PADIS Portfolio is a concentrated multifactor model that consists of 25-30 names. It contains

large cap companies focused on generating growth for investors.

It is a rules based portfolio to ensure the strictest form of investing using quality, momentum & value

factors.

While the portfolio is built to participate in a rising market, it will do so with less upside in a period of

strong rebound, but will increase protection on the downside, with the goal of beating its benchmark

over the long term with less volatility.

The PADIS portfolios began with a total of $5 million 4 years ago and has since grown to over $50

million.

Both portfolio manager and client interests are aligned through a performance based fee structure.

THIERRY TREMBLAY, MBA

Vice President, Portfolio Manager

Education: MBA Corporate Finance from UQAM

Experience: Over 17 years’ experience in the financial services ⎯ Macro analysis, business analysis & valuation, portfolio modeling, and Fx strategies are Thierry’s

fields of expertise.

NICK SHINDER, CIM

Vice President, Portfolio Manager

Education: Chartered Investment Manager Designation & B.Com in Accounting from

Concordia

Three Main Specialties: Tax reduction, debt strategy & multi-disciplinary investing

PROFESSIONALS

The Shinder Tremblay Group currently has $250 million in Assets

under Management (including the PADIS strategies) on behalf of

high net worth individuals, family offices and corporations.

Concentration

A multifactor approach

based on a certain set

of rules. It allows us to

consider a broad range

of companies and filter

them out according to

the individual factors

and rules that we deem

essential to create a

profitable investment

while lowering risk.

Low Correlation to

the Index

Our goal is not to make

the investor the most

money possible, it is to

protect the investor in

the event of down

markets while

continuing to profit in

up markets. One of the

ways this is

accomplished is

through a high active

share portfolios.

Balance Between

Quality and Value.

The model aims to

combine companies

that have value and

strong growth.

Disciplined Process

Systematic approach

using a set of specific

rules and objectives to

make sure the pitfalls

of cognitive biases are

avoided.

INVESTMENT PHILOSOPHY

OUR

PROCESS

High Conviction Portfolio

1

3

2

Style Factors

Screening & Ranking

STYLE FACTORS

● Quality ● Value ● Momentum

Style factors have been chosen through extensive research backdating to

2000.

Momentum

(33.33%)

Value(33.33%)

Quality(33.33%)

*Numbers have been rounded*

OUR PROCESS

OUR

PROCESS

SCREENING & RANKING

● S&P 500 Universe

We begin with a Universe of 500 U.S. Public Companies. We then select the

companies with the highest rating (score).

OUR PROCESS

High Conviction Portfolio

1

3

2

Style Factors

Screening & Ranking

Only the top 25 - 30 companies according to QVM

factors will be considered for their positions in the

portfolio.

SCREENING & RANKING

BUY RULES

QVM Ranking

TRIMMING RULES

If the company’s weight in the portfolio rises above

10%, the position is trimmed down.

If a company’s ranking falls below the 5th decile, it

will be removed from the portfolio.

SELL RULES

Ranking Company Rating

1 Company A 5

2 Company B 7

3 Company C 8

4 Company D 10

5 Company E 10

6 Company F 11

7 Company G 11

8 Company H 11

9 Company I 17

10 Company J 17

11 Company K 18

12 Company L 20

13 Company M 21

14 Company N 21

15 Company O 22

16 Company P 24

17 Company Q 25

18 Company R 26

19 Company S 28

20 Company T 29

21 Company U 35

22 Company V 36

23 Company W 36

24 Company X 37

25 Company Y 38

26 Company Z 38

27 Company AA 39

28 Company AB 42

29 Company AC 43

30 Company AD 45

Example

OUR

PROCESS

HIGH CONVICTION

PORTFOLIO

Companies ranked highest are then added to create a high

conviction portfolio.

OUR PROCESS

High Conviction Portfolio

1

3

2

Style Factors

Screening & Ranking

Company Sector Allocation

Cash 2.41%

LAM Research Corporation Technology 5.14%

The Hershey Co Consumer Staples 4.76%

Stryker Corporation Healthcare 4.48%

Johnson Controls International Industrials 4.45%

Paychex Inc. Industrials 4.29%

Automatic Data Processing Inc. Industrials 4.27%

Home Depot Consumer Discretionary 4.27%

Clorox Co Consumer Staples 4.17%

The Estee Lauder Companies Inc. Consumer Staples 4.08%

Church & Dwight Co Inc. Consumer Staples 3.72%

Total for top 10 stocks* (excluding cash) 43.63%

Remaining Positions 56.37%

TOP TEN HOLDINGS

*As at September 30th 2019 13

SECTOR ALLOCATION*

U.S. PADIS SPDR S&P 500 ETF

Minimum Maximum

Materials

Telecommunication

Services

Consumer Cyclical

Consumer Staples

Energy

Financials

Healthcare

Industrials

Real Estate

Technology

Utilities

0% 25%

0% 25%

0% 25%

0% 25%

0% 25%

0% 25%

0% 25%

0% 25%

17.28%10.35%0% 25%

0%25%

0% 25%

2.40%

3.38% 3.40%

11.72%9.08%

8.09% 22.83%

4.51%

15.63%6.09%

13.50% 21.11%

17.82%

3.20%

23.24%

3.57%

*As at September 30th 2019

US PADIS SPDR® S&P 500 ETF

Ann. Compound ROR 13.66% 11.88%

Ann. Standard Deviation 13.65% 14.61%

12 Month Return 5.72% 4.72%

Sharpe Ratio 0.823 0.634

Beta 0.888

Alpha 0.867

R-Squared 90.45

Trailing 12 Month Yield 2.20%

Up Capture Ratio** 94.46%

Down Capture Ratio** 75.67%

Active Share** 88.04%

Turnover Ratio*** 56.17%

PORTFOLIO STATISTICS*

RISK/REWARD ANALYSIS (Since Inception – September 6th 2017)

*As at September 30th 2019

PORTFOLIO STATISTICS

GROWTH OF $10,000 (Since inception vs. the SPDR S&P 500 ETF)

Source: SIA charts

*Returns are pre-fees

SUMMARY

1. EXPERIENCED TEAM

2. DISCIPLINED AND REPEATABLE

INVESTMENT PROCESS

3. STRONG PERFORMANCE SINCE INCEPTION

4. LOWER VOLATILITY STRATEGY*

5. LOW CORRELATION TO THE BENCHMARK

*As of March 31st 2019, measured using beta and standard deviation compared to the SPY

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COMPARISONS(AS AT APRIL 30TH 2018)

CONTACT INFO

If you would like more information, please feel free to contact us:

Thierry Tremblay:

Email: ttremblay@echelonpartners.com

Phone: (514) 905-3620

Linked: : www.linkedin.com/in/thierry-tremblay-mba-94b3a846

Nick Shinder:

Email: nshinder@echelonpartners.com

Phone: (514) 905-3619

LinkedIn : www.linkedin.com/in/nick-shinder-463a48155

Or visit our website at: shindertremblay.caSHINDERTREMBLAY.CA

Echelon Wealth Partners Inc. is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.

This newsletter is solely the work of Nick Shinder and Thierry Tremblay for the private information of their clients. Although the author is a registered Investment Advisor

with Echelon Wealth Partners Inc. (“Echelon”) this is not an official publication of Echelon, and the author is not an Echelon research analyst. The views (including any

recommendations) expressed in this newsletter are those of the author alone, and are not necessarily those of, Echelon. Every effort has been made to ensure that the contents

have been compiled or derived from sources believed to be reliable and contain information and opinions that are accurate and complete.

Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve

risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been

correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.

mailto:ttremblay@echelonpartners.comhttp://www.linkedin.com/in/thierry-tremblay-mba-94b3a846mailto:nshinder@echelonpartners.comhttp://www.linkedin.com/in/nick-shinder-463a48155http://shindertremblay.ca/