Aventine Asset Management: May 2017 Manager Letter

June 16, 2017


June 16, 2017


Performance Update and Manager Commentary

For the Month of May 2017

Monthly Performance Summary

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

  Fund vs. Benchmark May 2017 YTD Since Inception, Annualized
Return Volatility
  Aventine Canadian Equity -1.5% 5.0% 9.5% 11.0% 
       Benchmark -1.3% 1.5% 5.2% 7.9%
  Aventine Stable Income  -1.2% 1.6% 8.4% 5.1%
       Benchmark -0.8% 2.0% 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 Fund saw solid earnings reports from some of our largest holdings contribute positive returns to our monthly tally, but these gains were not enough to offset the performance drag from our holdings in the financial and energy sectors.  As a result, our stretch of positive months in 2017 came to an end with a decline of -1.5% in May.  While this decline was in line with the S&P/TSX Composite Total Return Index, which was down -1.3%, our unit price remained up 5% in 2017, a performance ranked as within the top 3% of all Canadian Equity funds.

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 fell 1.2% in May (F Class, net of all fees and expenses) as the Fund’s positioning suffered from falling commodity prices, contracting government bond yields and the corresponding rotation of equity investors into more defensive sectors. Overall the decline was orderly throughout the month, broadly mirrored what we saw across Canadian equity and preferred shares generally, and presents a buying opportunity in our opinion.  Worries about the economy and housing market seem overblown at this point, but emotional investment views can take time to flush out.  We’ve made no recent changes to our outlook: we still see both equities and bond yields moderately higher in 12 months’ time.  Finally, we have begun to favor the more hybrid attributes of convertible bonds in our fixed income portfolio as a replacement for high yield exposure, which we see as fully valued.

Additional Fund Information
Fund Presentation Offering Memorandum Subscription Agreement

Where To Find Us
 Andrew Shortreid
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Jim Pottow
416.847-1737 x502
James Telfser
416.847-1737 x501
Shannon Veitch
Investor Service
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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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