Manager Letter

Aventine Asset Management: June 2017 Manager Letter

July 19, 2017



 

July 19, 2017

 



Performance Update and Manager Commentary

For the Month of June 2017

Monthly Performance Summary
Fund performance is for F Class Units and presented net of all fees and expenses. 

  Fund vs. Benchmark June 2017 YTD Since Inception, Annualized
Return Volatility
  Aventine Canadian Equity 1.5% 6.6% 9.8% 10.8% 
       Benchmark -0.8% 0.7% 4.8% 7.9%
  Aventine Stable Income  1.0% 2.6% 8.4% 5.1%
       Benchmark 0.2% 2.2% 6.9% 5.4%
Additional performance information available on our website at  www.aventine.ca.

Aventine Canadian Equity Fund
A concentrated, all-cap equity fund with a focus on undervalued, catalyst rich stocks and downside protection.  This Fund was launched on March 31, 2014.

Executive Summary

The ACE Fund delivered a very solid first half of 2017. With a +6.6% return after all fees and expenses the Fund’s results year-to-date rank in the top 1% of Canadian equity funds tracked by Morningstar.  June’s return of +1.5% compared well to the S&P/TSX Composite Total Return Index (“TSX”) performance of -0.8%.  With the TSX having risen only 0.7% in 2017 and the average Canadian Equity Fund up only 1% we have maintained our position at the top of the Canadian Equity category over the Year-to-Date, 1-Year, and 3-Year time periods. While we benefited from a few catalysts by way of M&A early in the year, it was our positioning in financials and non-resource companies that contributed the most during Q2.

Additional Fund Information
  Fund Presentation Offering Memorandum Subscription Agreement

Aventine Stable Income Fund
A low volatility tax-effective income portfolio with a focus on bonds, preferred shares and high quality dividend growth stocks. This Fund was launched on January 13, 2017, based on a strategy managed by Aventine since December 1, 2008. 

 

Executive Summary

The Aventine Stable Income Fund gained 1.0% after fees and expenses in June, rebounding well from May’s shallow decline. The Canadian investment markets have seen big changes take place since our last letter and on balance those changes have played into our positioning. We had noted several times in prior letters that (contrary to the consensus view) the probability of a 2017 rate hike by the Bank of Canada was too low given strong economic growth over the past 12 months. With the tightening campaign now underway we expect gradual, upward trends in interest rates and the Canadian dollar to solidify. At the present time we are fully invested and continue to see attractive opportunities in low duration hybrid income securities such as rate reset preferred shares, senior loans, convertible bonds and structured notes – asset classes which collectively represent approximately 47% of the Fund’s capital.

Additional Fund Information
Fund Presentation Offering Memorandum Subscription Agreement

Where To Find Us
 Andrew Shortreid
President
416.847-1737 x500
as@aventine.ca		 Jim Pottow
Partner
416.847-1737 x502
jp@aventine.ca		 James Telfser
Partner 
416.847-1737 x501
jt@aventine.ca		 Shannon Veitch
Investor Service
416.847-1737 x510
sv@aventine.ca
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This email communication is intended to provide you with information about the Aventine Canadian Equity Fund and the Aventine Stable Income Fund managed by Aventine Management Group Inc. (the “Funds”). The Funds are distributed by prospectus exemption in various jurisdictions across Canada, please contact Aventine Management Group Inc to discuss if you may be eligible to invest.  Important information about each Fund is contained in its Offering Memorandum which should be read carefully before investing and may be obtained from Aventine Management Group upon request, or by clicking on the link contained in this email. The Offering Memorandum does not constitute an offer or solicitation to anyone in any jurisdiction in which such an offer or solicitation is not authorized, or to any person to whom it is unlawful to make such an offer or solicitation. All investors should fully understand their risk tolerances and the suitability of the Funds prior to making any investment. Rates of return presented for all periods greater than one year are the historical annualized compound total returns for the period indicated. For periods less than one year the rates of returns are a simple period total return. Rates of return do not take into account income taxes payable that would have reduced net returns. The performance presented for the ACE Fund is the performance of the target series of F Class units. The value of the Funds is not guaranteed and will change frequently. Past performance may not be repeated. All credited third party information contained herein has been obtained from sources believed to be reliable at the time of writing but Aventine Management Group Inc makes no representations as to its accuracy. 
Copyright © 2017 AVENTINE MANAGEMENT GROUP INC., All rights reserved.

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