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Virtual Brunch – Pembroke International Growth Strategy: 2020 review and outlook

On Wednesday, November 18th, Dominic Costantini, SVP, Pembroke moderated a discussion between Andy Flynn, CFA, Portfolio Manager at William Blair andPeter Morton, Vice chairman and Partner at Pembroke Private Wealth.

Key Takeaways

1. William Blair believes the Pfizer and Moderna “vaccine news” are game changers and set-up the next economic cycle and expansion over a multi-year period;

2. Pembroke and William Blair invest in a socially responsible manner and during the call Andy highlighted select companies we own that align with ESG themes, namely, EDP Renovaveis (wind and solar energy producer) Solaria Energia y Medio Ambiente (solar power generator) and Sweco (sustainable buildings and infrastructure);

3. Andy Flynn is optimistic about opportunities for investments in the Fund, and in particular will soon be gaining access to the China A-share market to invest in Chinese domestic growth businesses.

To learn more, please view the recording here:

Virtual Brunch – Post Election discussion between an Economist and a Portfolio Manager

On Monday, November 9th, Dominic Costantini, SVP, Pembroke moderated a discussion between Caroline Miller, CFA, Director of the Pembroke American Growth Fund and Jeff Tory, Chairman, Partner, Director and Portfolio Manager at Pembroke.

Key Takeaways

1. A divided government will constrain the implementation of a very progressive agenda, which is an outlook that is supportive for stocks;

2. “East money” and deficit spending will continue under a Biden administration, and while they will need to be reigned-in when inflation rises, that is probably 2-3 years away;

3. In some respects, the election results point to the US electorate being largely supportive of deficit spending but not paying higher taxes.

To learn more, please view the recording here:

Virtual Brunch – Focus on On-Line Learning

On Wednesday, October 28th, Jeff Tory, Chairman, Partner, Director and Portfolio Manager, David Whittall, Partner and  Chief Risk Officer and Fiona Tan, Vice-President and Account Manager of Pembroke commented on the state of the markets and provided behavioural insights.

Key Takeaways

1. As organizations continue to adapt to the pandemic, some of the adjustments being made may become permanent. Confinement and quarantine have temporarily curtailed travel, accelerated the adoption of timesaving videoconferencing and communication tools, and forced analysts, portfolio managers, and management teams to raise their technology skills. There are indications that these developments may, inadvertently, be shortening the time it takes investment teams to process new investment ideas. Gaps are also forming in the financial markets between purveyors of technology solutions, effective adopters of these solutions, and industries and enterprises that have been less effective at adapting.;

2.  Investment behaviours are formed over many years and hard-wired into investors. Increased financial market volatility, driven by oscillating pandemic data, accentuates fears and can bring out behavioral biases. Understanding and recognizing these biases and developing regular processes can help investors modify unwanted behaviours.;

3. Pembroke continues to develop tools to help our clients adapt to changing circumstances and achieve their investment goals. Our Investor Profile Summary and My3Bs Investor behavioral assessment are two recent tools available to clients. Contact your Pembroke representative to learn more.

To learn more, please view the recording here:

Virtual Brunch – Focus on the US Market in advance of the Presidential election

On Wednesday, October 14th, Jim Furey, Founder and Managing Partner, at Furey Research Partners, Andrew Garschagen, Partner and  Portfolio Manager of Pembroke and Darren Marsh, Associate, client services of Pembroke shared their strategic insights regarding the US markets in general and smaller companies in particular.

Key Takeaways

1. Ignore the political rhetoric – focus on policy. And both Presidential candidates’ policy platforms appear market-friendly on balance;
2.  Small-cap stocks are the cheapest relative to large-cap stock since the early 90s;
3. Considering the demographic factors impacting industrialized nations, we can expect low GDP growth, low inflation, low earnings growth and lower 10 year yields. Growth stocks tend to outperform value stocks in this environment.

To learn more, please view the recording here:

Virtual Lunch – Focus on a differentiated approach to dividends

On Wednesday, September 30th, Douglas Pospisil Partner and Portfolio Manager, Jeff Tory, Chairman, Partner, Director and Portfolio Manager and Fiona Tan, Associate, client services described how traditional growth investors approach investing in companies that pay a dividend.

Key Takeaways

1. The two primary contributing factors to equity returns over a long period of time are 1) earnings growth and 2) dividends. Valuation changes can have a meaningful impact on returns in any given 10-year period but over time, valuations have a negligible impact;
2.  Small-cap dividend stocks are an overlooked asset class resulting in more valuation inefficiencies.;
3. Pembroke has a differentiated strategy backed by a track record of outperformance. This strategy is built from the firm’s bottom-up research expertise combining an exposure to growth and yield backed by strongly aligned management teams.

To learn more, please view the recording here:

Virtual Brunch – Focus on Fixed Income and why bonds are not boring

On Thursday, September 3rd, Richard Usher-Jones Portfolio Manager at Canso Investment Counsel, Peter Morton, Vice chairman, Partner and Senior Account Manager, and Darren Marsh, Associate, client services  described what has been driving the fixed income markets this year and how active bond managers have added value during a period of significant volatility.

Key Takeaways

1. Canso is a laser focused fixed income only boutique which has 28 credit analysts actively working to evaluate existing and new corporate bond opportunities;
2. The volatility in the market allowed Canso to negotiate favourable terms with companies looking for credit;
3. Despite the recent period of relative calm, Canso continues to identify exciting opportunities in the market.

To learn more, please view the recording here:

Virtual Brunch – Disruption, ESG and the Power of Investing in Innovation

On Wednesday, August 19th, David Whittall Partner and Chief Risk Officer, and Florence Godard-Kalogiros, Research Associate, described the evolving landscape of environmental, social and governance (ESG) risk and the framework Pembroke uses to identify and assess ESG risk.

Key Takeaways

1. Disruption – The Carbon Transition; physical risk, transition risk, and tipping points;
2. Innovation and share-shifts
3. Identifying risk through the prism of ESG – Pembroke’s integrated Approach; (1) Inquire (2) Engage, and (3) Act

To learn more, read the attached  report or view the recording here:

 

 

Virtual Brunch – Pembroke’s Perspective on Investing in Growth and Disruption

On Thursday, July 23rd, Matthew Beckerleg, Partner and Portfolio Manager, and Andrew Garschagen, Partner and Portfolio Manager, provided an update on Pembroke’s Perspective on Investing in Growth and Disruption.

Key Takeaways

1. The current and expected economic backdrop is favorable for growth stocks;
2. While technology product disruption often captures popular attention, disruption takes multiple forms and is found in a variety of industries beyond technology;
3. Pembroke has a long and successful history investing in disruptive business across many industries;
4. The increasingly short-term nature of markets advantages long-term investors like Pembroke, who have a demonstrated competency analyzing multi-year opportunities.

To learn more, please view the recording here:

Virtual Lunch – View from the West Coast

On Wednesday, June 17th, Stephen Hui, CFA, Partner and Portfolio Manager provided an update on the View from the West Coast.

Key Takeaways

1. Uncertainty surrounding the pandemic is expected to persist, and investors must look beyond short-term market gyrations to businesses multiple years out;
2. Strong bottom-up homework on our holdings has paid dividends during the indiscriminate sell off in March;
3. The Pembroke portfolios are positioned for a multitude of different outcomes by backing flexible business models, solid balance sheets and talented management teams.

To learn more, please view the recording here:

Virtual Brunch – Canadian and US Market Updates

On Wednesday, June 3rd, Jeff Tory, Chairman, Partner and Portfolio Manager and Andrew Garschagen,Partner and Portfolio Manager provided an update on the Canadian and US markets.

Key Takeaways

1. As we are in a low growth environment, this is an attractive time to invest in more rapidly growing companies;
2. Predicting short term market moves is virtually impossible which is why we continue to recommend dollar cost averaging;
3. With interest rates at very low levels, stock market valuations are more reasonable than the appear at first glance.

To learn more, please view the recording here:

Virtual Lunch – International Growth Equities with Simon Fennell

On Wednesday, May 20th, from his office in London, UK, Simon Fennell, Partner and co-portfolio Manager at William Blair LLC shared his perspectives on international growth equities and the Pembroke International Growth Fund.

Key Takeaways

1. The Covid-19 virus has accelerated many trends that had previously existed in markets, economies and in society as well;
2. In an era of deglobalization, there are still excellent opportunities in high quality companies;
3. With massive government intervention in economies around the world, there is a blurring between the state and the private sector.

To learn more, please view the recording here:

Virtual Lunch – The Pembroke Global Balanced Fund

On Wednesday, May 13th, David Whittall, Partner and Chief Risk Officer, introduced the Pembroke Global Balanced Fund.Matthew Beckerleg, Partner and Portfolio Manager discussed the equity component of the fund and Richard Usher-Jones, Portfolio Manager at Canso Investment Counsel shared his perspectives on the fixed income component of the Pembroke Global Balanced Fund.

Key Takeaways

1. The Pembroke Global Balanced Fund is diversified across multiple asset classes to provide broad exposure, reduced risk, and more stable returns;
2. The fund uses active management where it makes sense to add value and passive management to reduce fees;
3. The fund is re-balanced automatically to remove human emotion from weighting decisions and is designed to be a key building block in most clients’ portfolios.

To learn more, please view the recording here:

 

Virtual Lunch – US Market Strategies with Jim Furey

On Wednesday, May 6th, investment strategist  James Furey, CFA Managing Partner at Furey Research Partners shared his perspectives on the economy and the drivers for Stock market performance in the coming years.

Key Takeaways

  1. Growth stocks are well positioned to maintain their recent leadership over value stocks given low interest rates, poor demographic trends, and challenged global economies;
  2. Sectors with asset light businesses models operating in secular growth markets, particularly technology and healthcare, are best positioned to prosper in the years ahead;
  3. The COVID-19 pandemic resulted in pressure on small-cap stocks, but history indicates that coming out of most bear markets, small caps outperform their large-cap brethren.

To learn more, please view the recording here:

 

 

 

Virtual Lunch – Pembroke Concentrated Fund – Q1 Update Call

On Wednesday, April 29th, Andrew Garschagen, Partner, Director and Portfolio Manager of Pembroke, discussed Pembroke’s concentrated fund strategy and provided a Q1 update on the Fund

Key Takeaways

  1. The Fund selects 12 to 18, high-quality businesses with long term secular growth opportunities from Pembroke’s existing portfolios, with each stock having 100% upside potential over the next 3-4 years;
  2. To address the risks associated with concentration, it invests in conservatively financed companies and strives to engineer out binary risk from the portfolio while adhering to a strict sell discipline;
  3. The Pembroke Concentrated Fund was launched on February 1st, 2018 and to date, it has achieved its objective of beating its benchmark by 400 – 600 bps annually.

To learn more, please view the recording here:

Virtual Lunch with a focus on Life After COVID-19

On Wednesday, April 23rd, Nicolas Chevalier, Partner, Director and Portfolio Manager of Pembroke, shared a framework for analyzing the pandemic’s evolution and its related impact on the economy as well as the issues around government debts and business involvement.

Learn more about the current and future environment, and various trends affected by the pandemic across different industries..

Key Takeaways

  1. We will be living in a part lock-in, part lock-out world until a virus is readily available;
  2. Pembroke is parsing between temporary changes versus those where the pandemic is accelerating long term secular changes across all sectors;
  3. Historically, Small Cap stocks outperform coming out of bear markets and recessions.

To learn more, please view the recording here:

Wednesday, April 24th, 2020

Virtual Lunch with a focus on Behavioural Finance

On Wednesday, April 15th, Jeff Tory, Chairman and Portfolio Manager of Pembroke, discussed how, why and to what extent our “humanness” affects decision making pertaining to financial issues and how this can impact the decisions we make during uncertain times.

Key Takeaways

  1. Markets have rallied strongly since March 18th, but continued volatility is expected;
  2. Common biases include loss aversion, confirmation bias, framing errors, group-think, overconfidence and regret;
  3. Focus on the overlap between things that matter and things that you can control.

To learn more, please view the recording here:

Wednesday, April 15th, 2020

Virtual Lunch with a focus on the Governments Response

One of the events that Pembroke had to cancel due to the COVID-19 pandemic was a client lunch with Pierre Fitzgibbon, Quebec Minister of Economy and Innovation. 

Nicolas Chevalier, Portfolio Manager and Partner at Pembroke spoke to the Minister on the phone and, with his permission, we are pleased to present a summary of that conversation. To learn more, please click here

Monday, April 6th, 2020

Virtual Lunch with a focus on International Equities

On Monday, March 30th, Andy Flynn, CFA, Portfolio Manager at William Blair LLC recapped what had taken place during the past month and how the GBC International Growth Fund was managed during a period of heightened uncertainty.

Key Takeaways

  1. William Blair remains close to their companies and has been actively managing the portfolio;
  2. They currently estimate that 10-20% of the companies they hold will emerge from this period in a stronger position;
  3. They expect a trend towards local manufacturing but caution that it is too early to predict the long term impact of the pandemic.

To learn more, please listen to the replay here:

Monday, March 30th, 2020

Virtual Lunch with a focus on Fixed Income

On Friday, March 27th, Richard Usher-Jones, Portfolio Manager at Canso Investment Counsel and Ian Aitken, Managing Partner of Pembroke, hosted a virtual client luncheon to discuss the active management of fixed income portfolios during times of crisis.

Key Takeaways

  1. Canso is using market volatility to improve the characteristics of the portfolio;
  2. Canso relies on its own assessment of each bond in the portfolio rather than relying on the rating agencies;
  3. Active management of fixed income portfolios is even more important during periods of great uncertainty;

To learn more, please listen to the replay here:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Virtual Lunch Text Summary

Friday, March 27th, 2020

Virtual Lunch with a focus on Equities

On Tuesday, March 24th, Jeff Tory, Ian Aitken and Matthew Beckerleg, hosted a virtual client luncheon discussing Pembroke’s approach to managing portfolios during uncertain times and how we are positioning the portfolios for the eventual recovery of the economy and the markets.

Key Takeaways

  1. Pembroke is deemed an essential service and remains open for business;
  2. The tremendous volatility in the financial markets that we are witnessing is caused by the high degree of uncertainty;
  3. In times of crisis, stocks get very cheap and investor despair. Historically, this has created opportunities for Pembroke and its clients.

To learn more, please listen to the replay here:

Virtual Lunch Text Summary

Tuesday, March 24th, 2020

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