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Fundamental Perspective

PCJ Small Cap Equity

Product Highlights

  • Bottom-up fundamental security selection
  • Concentrated portfolios maximize alpha opportunity
  • Excels in periods of high volatility
  • Experienced team focused solely on Canadian equities
  • Effective offset to core- and value-style managers

Investment Objective

Our strategy is designed to identify high quality small capitalization companies with superior opportunities for organic growth

Investment Philosophy

  • Market inefficiencies provide opportunities to add value
  • Earnings growth ultimately drives stock prices
  • Concentrated portfolios maximize value from manager insights
  • Catalysts for organic growth are best identified through independent fundamental research
  • Risk management is integral to creating long-term value

Investment Process

  • Goal: Identify high quality companies with opportunities for organic growth with a market capitalization ranging from $100 million to $1.5 billion.
  • Screen using growth variables, e.g.; ROE, earnings momentum
  • Identify catalysts for future growth, e.g.; earnings announcements, restructuring
  • Company meetings: Validate research, confirm confidence in management
  • Proprietary ranking system: Confidence and quality of growth opportunity

Portfolio Construction and Risk Controls

  • Optimize rewards for risk taken
  • Portfolio concentrated (up to 30%) on best ideas
  • Sector weights evaluated relative to macro market themes
  • Absolute and relative stock and sector limits
  • Continuous monitoring of security specific and total portfolio risk
  • Dynamic risk allocation is used to lock in profits and reduce risk
Quick Facts
Inception Date July 31, 2000
All data as at: May 25, 2018
Sector Allocation
% of Portfolio
Materials 34.58%
Energy 25.54%
Industrials 18.29%
Real Estate 7.67%
Consumer Discretionary 4.79%
Information Technology 3.87%
Financials 2.14%
Consumer Staples 1.27%
Utilities 0.86%
Health Care 0.85%
Cash 0.14%
Telecommunication Services 0.00%
Top 10 Securities
% of Portfolio
Interfor Corporation 3.34%
Hardwoods Distribution 2.93%
Western Forest Products Ltd. 2.36%
ATS Automation Tooling Systems Inc. 2.35%
Secure Energy Services Inc. 2.34%
TORC Oil & Gas Ltd 2.29%
Parex Resources Inc. 2.21%
Tricon Capital Group Inc 2.16%
Canadian Western Bank 2.14%
Ero Copper Corp 2.13%
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