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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: Aug 17, 2018
Sector Allocation
% of Portfolio
Energy 26.82%
Materials 26.50%
Industrials 21.91%
Consumer Discretionary 6.05%
Real Estate 5.74%
Information Technology 5.60%
Consumer Staples 2.48%
Financials 2.10%
Utilities 1.70%
Health Care 0.91%
Cash 0.19%
Telecommunication Services 0.00%
Top 10 Securities
% of Portfolio
Interfor Corporation 4.17%
ATS Automation Tooling Systems Inc. 2.94%
Hardwoods Distribution 2.92%
TORC Oil & Gas Ltd 2.91%
Kinaxis Inc. 2.88%
Cargojet Inc 2.72%
Trinidad Drilling 2.45%
Raging River Exploration Inc. 2.34%
Kirkland Lake Gold Ltd 2.26%
Canadian Western Bank 2.10%
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