US Large Cap Growth Equity Fund

Risk Considerations

The Fund is actively managed and invests mainly in a diversified portfolio of shares from large capitalization companies in the United States that have the potential for above-average and sustainable rates of earnings growth.
Investment in the Fund involves risks, including general investment risk, equity market risk, risks associated with depositary receipts, exclusion criteria risk and geographic concentration risk which may result in loss of a part or the entire amount of your investment.
The Fund may use derivatives for hedging and efficient portfolio management and is subject to derivatives risk. Exposure to derivatives may lead to a risk of significant loss by the Fund.
The value of the Fund can be volatile and could go down substantially.
Investors should not invest in the Fund solely based on this document.

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Overview

Strategy

Fund Summary

We look to identify stocks with the potential to deliver sustainable, double-digit earnings growth, capitalising on both secular and cyclical growth. We are patient investors, aiming to invest in companies trading at attractive valuations relative to their long-term potential and taking advantage of cyclical opportunities to build positions in high conviction names. The manager is not constrained by the fund's benchmark, which is used for performance comparison purposes only.

Performance - Net of Fees

Past performance is not a reliable indicator of future performance.

30-Nov-2023 - Taymour Tamaddon, Portfolio Manager,

US equities advanced in November, enjoying their best month in over a year as investors welcomed signs of cooling inflation and falling bond yields. Within the portfolio, stock choices and an overweight position in the health care sector detracted, primarily due to our significant holding in a managed care provider whose shares fell on reports that it was considering a sale of its Medicare Advantage business. Unfavourable stock selection in the consumer discretionary sector also hurt performance, led by our lack of exposure to a leading electric vehicle manufacturer that rebounded following a post-earnings sell-off in October. On the positive side, information technology added the most value due to our security choices. Here, our overweight position in an enterprise software provider boosted performance as its shares surged late in the month following its release of consensus-topping quarterly earnings results. Financials also assisted relative results due to security selection. In particular, shares of a leading buy now pay later company climbed higher after reporting better-than-expected gross merchandise volume and improving expense discipline, along with a report that it would be partnering with a large ecommerce company.

30-Nov-2023 - Taymour Tamaddon, Portfolio Manager,

We are content with how the portfolio is currently structured and made no material changes to positioning during the month. While many investors are speculating that continued disinflation trends and resilient economic growth could offer an increasingly suitable runway for a soft landing, with rate cuts to follow in 2024, we continue to exercise caution and maintain some defensive posturing. In addition to traditional defensive exposure, we would note that given the relative strength in fundamentals for many of our mega-cap technology holdings, this sleeve of the portfolio could provide some underappreciated downside support in a downturn.

30-Sep-2022 - Taymour Tamaddon, Portfolio Manager,

We sold shares of Alphabet to manage our position size in light of weakening industrywide advertising demand signals. A slate of disappointing earnings reports released by peers during the quarter prompted investor concerns of a broad-based digital advertising recession. However, we remain encouraged by the deep moat that Alphabet has built around its core search franchise. Over the long term, we continue to believe that Alphabet, with dominant positions across everyday use internet utilities, combined with a world-class computing infrastructure and talent, is well positioned to extract value from the economy as the world becomes more digital.
We sold shares of Meta Platforms on heightened near-term risk/reward. An industrywide slowdown in ad demand has taken a toll on the social media giant's topline growth. Meta's advanced, hyper-optimized advertising solutions mean that the company faces a deeper reset than others as it designs workarounds to restore the signal loss resulting from Apple's iOS privacy changes. Meta is one of two leading platforms that we expect to benefit from a multi-decade transition from offline to online advertising, and it offers investors a rare combination of scale, growth, and profitability at an attractive valuation with multiple catalysts that include a collection of under-monetized surfaces and social commerce initiatives.
We initiated a position in Eli Lilly. We are optimistic following the U.S. Food and Drug Administration's approval in May of the new diabetes drug tirzepatide, which will be branded as Mounjaro. Robust sales volumes of cancer and COVID-19 antibody drugs are also encouraging. We believe that the company has several late-stage assets with high probabilities of success that should serve as catalysts over the next 12 to 18 months. We also expect Eli Lilly's base business to remain stable against competition and drug pricing pressures, and we are encouraged by management's goal of increasing the company's operating margin percentage over the next five years.
We established a position in energy drink company Monster Beverage on weakness. The stock price slumped in response to Monster's second-quarter earnings release in early August, as the company reported its gross margin far below consensus expectations due to cost inflation. We like Monster for its durable topline growth and strong position in the fast-growing, high-margin energy drink category and think its setup improves from here as price increases take hold and input costs come down.

30-Sep-2022 - Taymour Tamaddon, Portfolio Manager,

Shares of Cigna climbed higher in the wake of a solid second-quarter earnings release in August. The positive results were driven by a better-than-expected medical loss ratio and continued strength in its Evernorth segment. We believe that Cigna represents an underappreciated source of steady growth at an attractive valuation and that the acquisition of Express Scripts should enhance the company's overall earnings growth profile. Cigna also has significant exposure to commercial markets in which we think that the company will be able to exercise pricing power in the near term.
Shares of Ross Stores rose. Investors were content with its second-quarter earnings results, which were in line with expectations. The off-price retailer also appeared to benefit from heightened expectations of an economic downturn and projections that it may benefit from changing consumer behavior. We believe Ross Stores will remain a long duration earnings growth story through a combination of square footage expansion and solid same-store sales growth. In addition, we view the stock's risk/reward profile as compelling.
Shares of Rivian Automotive rebounded. In July, Amazon.com began rolling out its fleet of Rivian electric delivery vans in select cities. The introduction of the sweeping Inflation Reduction Act in the U.S. Senate, which would include an improvement to the electric vehicle tax credit, also buoyed the stock. In August, investors reacted positively to management commentary that was incrementally more optimistic regarding the potential for Rivian to meet or exceed its production guide. We believe that Rivian is well positioned to benefit from the automotive industry's most powerful trend of electrification as it targets the largest, most profitable segments of this growing market (mid-size luxury and large luxury). Led by a very capable management team, we expect Rivian to benefit from strategic partnerships and business-to-business trends that should provide stability, as well as scale efficiencies for its business-to-consumer segment
Shares of Snap Inc. plunged due to a disappointing second-quarter earnings report, which management attributed to a challenging economy, slowing demand for the company's online ad platform, the lingering impact of Apple's 2021 iOS privacy changes update, and rising competition. In response to these challenges, the company announced plans to slow its pace of hiring, invest in its advertising business, and find new sources of income. Management also announced a share repurchase program. Snap Inc.'s control of the impressionable and highly engaged youth demographic, relatively low ad load, and culture of innovation combine to form a tightly coiled monetization spring. We believe that network effects and innovations in technology will continue to drive user growth and engagement, paving the way for ad inventory expansion that should drive earnings growth over time.
Shares of ServiceNow fell after management took down its full-year subscription revenue outlook due to the impact of a strong U.S. dollar; the company earns a large portion of its revenue from countries that have seen their currencies depreciate against the dollar. We believe that ServiceNow's strong platform should allow it to continue to take share within its core market and expand to adjacencies outside of IT service management.

Risks

Typical Investor