Our approach to investing begins with more than 20 years of fundamental research experience. Veritas Asset Management was founded to capitalize on the successful fundamental research of our affiliate Veritas Investment Research (‘VIR’). Throughout VIR’s 20+ years of producing independent research, it has proven that detailed, high-quality fundamental research produces better investment decisions. Our goal is to provide our investors with consistent risk-adjusted returns that beat investment benchmarks over the short and long term.
Our portfolios offer concentrated, high-conviction positions in companies identified through our research and due diligence work, applying a disciplined and systematic selection process. Through our research, we identify opportunities to profit from mispriced securities, either by buying top-quality companies for long-term capital appreciation or through long-short hedging strategies. While our portfolios are primarily focused on Canadian equities, our portfolio managers also consider opportunities beyond Canada.
Hopes for an end to the current cycle of rate hikes spurred a strong start to equity markets in 2023. Much of the rally was due to a resurgent Information Technology sector which contributed more than two-thirds of the first quarter index move in the S&P 500 and roughly one-third of the return for the S&P/TSX.
In this update, we review some of the fundamentals supporting the current rally and outline how we are positioning our portfolios for the current environment, including some of the top picks in our funds.
Agnico Eagle Mines Ltd. (TSX, NYSE: AEM) was the top contributor to the fund in April. The gold company reported its first quarter results at the end of April, which showed better-than-expected ore grades throughput and costs. AEM’s transaction to buy out the remaining 50% of Canadian Malarctic increases its exposure to gold and should generate efficiencies over the longer term, particularly in processing. Other top contributors were Canadian Natural Resources (TSX, NYSE: CNQ), ARC Resources Ltd. (TSX: ARX), BCE Inc. (TSX, NYSE: BCE) and Telus Corporation (TSX: T, NYSE: TU).
Next Edge Capital Corp. launched the Veritas Next Edge Premium Yield Fund in June 2022. As a sub-advisor, Veritas Asset Management Inc. utilizes the award-winning, independent, and in-depth research of Veritas Investment Research Corporation to formulate a diversified portfolio of equities with a bias toward yield, and capital preservation, and uses a covered option overlay to generate additional yield and further mitigate downside risk and volatility.
Visit Next Edge to learn more about the fund and read the full monthly commentary.