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.
For the first year since 2016, the S&P/TSX is on pace to beat the S&P 500 in 2022, with a return of -3.3% through November 15, versus -15.1% for the S&P 500. Conventional wisdom holds that the TSX is a highly concentrated index - with a 61% weighting to Financials, Energy and Materials - while the S&P 500 is much more diverse. However, we think the S&P 500's weighting in mega-cap tech should raise similar concerns. This month, we consider sector exposures for both indices and outline why we see the TSX outperforming again in 2023.
Bombardier Inc. and Cenovus Inc. were the largest contributors to the Veritas Next Edge Premium Yield Fund’s performance in October. With a view that the risks are higher for materials, the Fund carries an underweight position in the sector, at 5.6% versus 11.3% for the S&P/TSX Composite Index. The Fund also has a view that the risks are decreasing for utilities.
Next Edge Capital Corp. launched the Veritas Next Edge Premium Yield Fund in June 2022. As 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 monthly commentary.
Please listen to the replay of this discussion from November 1 featuring Anthony Scilipoti, President & CEO of Veritas Investment Research, and Rob Anton, President of Next Edge Capital. They provided an overview of the Canadian equity markets, top ideas, and an introduction to the Veritas Next Edge Premium Yield Fund.