2015-Q1 – Total Equity Pool - Antares Investment Management

Q1 2015
ANTARES TOTAL EQUITY PORTFOLIO
PORTFOLIO PHILOSOPHY
GEOGRAPHIC ALLOCATION
Antares Total Equity Portfolio utilizes a rigorous screening process
focused on the selection of companies with the following attributes:
• Global leaders in their industry
• A demonstrated ability to protect against competition
• Skillfully allocate their capital resources
Our selection process accounts for key quantitative and qualitative factors
that we believe have the ability to produce consistently strong investment
returns which cannot be achieved by simply investing in a broad market
index. We feel there are many good and bad investment options within
broad market indices, and only through disciplined fundamental security
analysis can a portfolio be built that contains only the best.
INVESTOR CLASSIFICATION: CAPITAL APPRECIATION
Antares Total Equity Portfolio has been built for the investor focused on
capital appreciation. Typically these investors have longer investment
time horizons and desire a stream of strong investment returns generated
from dividends and increasing share values. To help achieve this objective
in a consistent fashion we select companies that exhibit financial strength,
high levels of stability, with strong continued growth prospects.
INTERNATIONAL 73%
CANADA 27%
SECTOR ALLOCATION
FINANCIALS 38%
TECHNOLOGY 27%
CONSUMER PRODUCTS 20%
INDUSTRIALS 9%
HEALTHCARE 5%
COMMENTARY FOR Q1-2015
We have continued to focus on capital efficient businesses with consistent and growing profits such as TJX, Oracle, Markel
Corp, Starbucks, and Fairfax Financial just to name a few. We feel we are not only positioning our clients for future growth
with the world class companies we have selected, but just as important we feel strongly that the companies we hold in this
portfolio are resilient and have the strength to prosper even through trying economic times. Our persistent focus on selecting
companies which are able to produce high returns on owner capital continued to produce benefits for our clients this past
quarter. The Total Equity Pool was able to produce a 7% gain while both the S&P 500 and the TSX were virtually flat over the
quarter.
PORTFOLIO ACTIVITY
NOTABLE PERFORMERS
Holdings Entered: 2
Markel Corporation
Constellation Software
Increased Weight:
Nike
TJX Companies
Oracle Corporation
Holdings Exited: 2
Bank of Montreal
Rogers Communications
Decreased Weight:
Royal Bank
Bank of Nova Scotia
Holdings at Quarter End: 20
814-1661 Portage Ave
Winnipeg, Manitoba
R3J 3T7 Canada
P 204 975 5131
F 204 925 5960
TF 1 866 975 3888
Fairfax Financial Holdings: Up 19% over
the quarter. Led by Prem Watsa, widely
considered one of Canada’s savviest
investors, Fairfax continues to post
large gains as a result of strong capital
allocation decisions in both its insurance
and private investment operations.
Starbucks: Up 17% over the quarter.
Consumer experience, customer loyalty,
and brand strength continue to propel this
marketing juggernaut forward. Growth
initiatives are producing real sales and
income increases.
info@antaresinvestment.ca
antaresinvestment.ca
Q1 2015
ANTARES TOTAL EQUITY PORTFOLIO
DIVIDEND REPORT – MOST RECENT 12 MONTHS
Dividend Movers
Increased Dividend: Maintained Dividend: Decreased Dividend: 12-month Growth Rate: Top Dividend Movers
The top percentage dividend increases came
from Monsanto (+14%), IBM (+16%), Nike (+17%),
Manulife (+19%), TJX (+20%), Starbucks (+23%),
Oracle (+25%)
15 5 0
9.9%
Oracle
Starbucks
TJX Companies
Manulife Financial
Nike
Intl Business Machines
Monsanto Co
Microsoft
Cisco Systems
United Parcel Service
Royal Bank of Canada
Coca-Cola
Bank of Nova Scotia
Johnson & Johnson
Great West Lifeco
25.0%
23.1%
20.0%
19.2%
16.7%
15.8%
14.0%
10.7%
10.5%
9.0%
8.5%
8.2%
6.3%
6.1%
6.0%
0.0%
5.0%
10.0%
PORTFOLIO FUNDAMENTALS
P/E (forward):
Average Market Capitalization:
ROE:
5-Year Average ROIC:
Div Yield (current):
Div Yield (expected):
5-Year Dividend Growth:
Dividend Payout Ratio:
15.0%
20.0%
25.0%
KEY HOLDINGS
17.9X
132bn
17.5%
17.1%
2.1%
2.4%
15.0%
39.0%
Fairfax Financial Holdings
Oracle
Markel Corporation
Nike
TJX Companies
Microsoft
Cisco Systems
Johnson & Johnson
TOTAL EQUITY FEATURES
INVESTMENT TEAM
Gerry Bettig, CFA, President
With over 17 years of experience in the investment industry, Gerry leads the
portfolio management team as Chief Investment Officer. Gerry founded Antares
Investment Management in 2004.
Paul Allard, CFA, Senior Vice President
Paul has over 15 years of investment industry experience, including working
overseas as Lead Portfolio Manager of an Australian based hedge fund.
Robert MacKay, CFA, Investment Analyst
Robert brings extensive academic training and business acumen to the portfolio
management team, including 8 years of industry experience in corporate finance.
814-1661 Portage Ave
Winnipeg, Manitoba
R3J 3T7 Canada
P 204 975 5131
F 204 925 5960
TF 1 866 975 3888
The Total Equity Portfolio is available to investors as
a Separately Managed Account with direct holdings of
securities, and also within a pool investment structure.
The investment pool offers unique downside protection
characteristics as the managers have the ability to hedge
the portfolio. The hedge is linked to general market
declines and is intended to diminish losses in the case
of significant market corrections of 10% or more. The
managers utilize the hedge program at their discretion
and will use it during periods where they believe there is
greater risk of market decline.
©Antares Investment Management, Inc. 2015. This communication is intended
for residents of the provinces in which we are registered and is not meant to
be a solicitation to any persons not resident in those provinces. Any opinions
expressed in this newsletter are just that, and are not guarantees of any future
performance or returns. The report is prepared for general informational
purposes only and the securities mentioned in this report should not be
construed as a recommendation for any specific securities.
info@antaresinvestment.ca
antaresinvestment.ca