Canadian General Investments Ltd (TO:CGI) aims to generate an attractive total return from a portfolio of primarily Canadian equities. Manager Greg Eckel describes the fund as a ‘one-stop-shop’ for investment in Canada. He says that the country is currently out of favour with investors, and equity valuations are reasonable, which may provide an attractive opportunity. While he invests for the long term, Eckel actively manages CGI’s portfolio, seeking to buy companies with attractive fundamentals and long-term growth potential, while adding to or trimming existing positions to maximise returns. This strategy has proved effective, with CGI outperforming its S&P/TSX Composite index benchmark over one, three, five and 10 years. It also offers an attractive dividend yield of 3.5%.
Investment strategy: Seeking long-term winners
Eckel’s unconstrained investment approach is illustrated by large divergences in sector exposure compared with the benchmark, such as overweight positions in technology and consumer discretionary stocks, and a meaningful underweight in financial companies. He seeks firms with robust fundamentals and strong management teams. While the majority of the portfolio is invested in Canadian equities, up to 25% may be in US companies to take advantage of investment opportunities unavailable in Canada.
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