Yorkville Asset Management

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Yorkville Perspective

Stay informed through Yorkville’s communications, in which our investment professionals share their current outlooks and strategies, giving insight into the markets and the management of your wealth.

Market Commentary

Yorkville's President & CEO, Hussein Amad, discusses volatility in the markets as a result of the COVID-19 pandemic and outlines Yorkville's strategy for dealing with this volatility. Please click here for the full article. 

Yorkville's President & CEO, Hussein Amad, discusses volatility in the markets as a result of the COVID-19 pandemic and outlines Yorkville's strategy for dealing with this volatility. Please click here for the full article. 

Yorkville's President & CEO, Hussein Amad, discusses what we've witnessed in the markets this year, as well as Yorkville's perspective on the remainder of 2019. Please click here for the full article.

We often get questions about our QVR (Quality, Valuation, Risk) investment strategy, and how our Portfolio Management Team implements it. Associate Portfolio Manager, Ruben Kamhi, explains the process, as well as provides some concrete examples. Please click here for the full article.

Almost everyone has the ability to access the internet through their smart phones, which has exponentially expanded the eGaming platform and those that have access to it. Associate Portfolio Manager, Jillian Wade, discusses Yorkville’s perspective on the industry, and how we plan on taking part. Please click here for the full article.

Rob Featherby, our Head of Fixed Income, comments on the status of Fixed Income Markets. Click here to read more.

The Fed is raising rates. But this isn't a typical rate hike cycle, as lower Long Bond yields after each hike seem to say the Fed has done "enough" to halt the expansion. Please click here to read "Easy does it...".

As we transition to a new year, we look at where the markets are now relative to a year ago. Click here to read more of Brian Lavery, Director and Portfolio Manager commentary on "Market Conditions - Greatly Improved YoY"

The US Federal Reserve pushed the FED Funds rate higher by 0.25 of a percentage point to the range of 50-75 bps (from 25-50 bps) – this move was entirely as expected. Read more of Brian Lavery, Director and Portfolio Manager commentary on "US Fed Raises Rates" here.

 

 

This year’s shopper got off to a late start compared to last year, with a noticeable lag starting and completing holiday shopping. Read more of Brian Lavery, Director and Portfolio Manager commentary on "Consumer Spending Driving Economy" here.

Economists and strategists could rarely be so right and wrong at the same time. For the past eleven months this was also the mode at Yorkville. Click here to read more.

The much feared by Wall St. (and Bay St.) presidential victory by Donald Trump has taken on somewhat of a “Bizarro World” persona with a post‐election market rally in place of an anticipated nosedive.  So…why would this be so? Click here to read more of Brian Lavery's, Director and Portfolio Manager commentary. 

So…..what are we doing to protect downside due to the US election?  Click here for a look at Brian Lavery, Director and Portfolio Manager, explanation on the matter.

The US Federal Reserve desperately needs an Intervention to change it’s destructive behavior. Please click here to see  "The Fed needs an Intervention"

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, gives his opinion on the ongoing debate regarding rate hikes. Please click here to see his piece titled "Fed hikes +25 bp. Why?"

Yorkville's Chief Investment Strategist, Hussein Amad, comments on the uneasy beginning to 2016 in his commentary titled 'Worst Week in Wall Street History'. Please click here to read his market update.  

Yorkville's Deputy Chief Investment Strategist, Raphael Aronowicz, expresses Yorkville's views on the markets, economy and our portfolios. Please click here to read his intriguing report. 

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, gives his opinion on the ongoing debate regarding rate hikes. Please click here to see his piece titled 'December rate hikes back on... maybe'. 

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, discusses credit markets. Please click here to see his piece titles 'Cracks in the Ice'. 

Yorkville's Fixed Income Portfolio Manager, Robert Feathery, discusses if the Fed will ever raise rates and what comes after QE. Please click here to read his article titled 'Choppers!'. 

Yorkville's Deputy Chief Investment Strategist, Raphael Aronowicz, discusses the equity selloff in September and recent volatility in the markets. Please click here to read his report titled 'Volatility Monitor'. 

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, gives an update after the FOMC meeting on June 17, 2015. Please click here to see his piece titled If the Fed ever does hike, expect 'One and Done'.

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, gives an update after the FOMC meeting on March 18, 2015. Please click here to see his piece titled The Fed is Letting Go of the Balloon. 

Yorkville's Deputy Chief Investment Strategy, Raphael Aronowicz, introduces a new investment theme seen in Yorkville's portfolios called 'Cyber Security'. to learn more about this investment theme, please click here

Yorkville's Deputy Chief Investment Strategist, Raphael Aronowicz, sheds light on Yorkville's QVR (Quality, Valuation and Risk) investment methodology. Sticking to this discipline helps us to avoid many of the mistakes investors fall victim to, leading to poor returns and the destruction of capital. Too often are investors seduced into chasing returns of high-flying growth stocks, or speculating on the "flavour of the month", only to be disappointed when the hype fails to deliver. The QVR methodology was designed to ensure we don't fall victim to these temptations by focusing on the factors we know make successful investments.

To learn about Yorkville's QVR methodology, please click here. 

Robert Featherby, Yorkville's Fixed Income Portfolio Manager, gives his comments on the Fixed Income Markets. Please click here to read his piece titled Why did the Fed end QE? 

Yorkville's Fixed Income Portfolio Manager, Robert Featherby, gives an update after the FOMC meeting on December 17, 2014. Please click here to see his piece titled Patience.

The recent market turmoil has caused markets to fall 3% below the peak they reached two weeks ago. Current market volatility is high and investors have been rushing to protect themselves against a potential impending sell-off.

Yet Yorkville’s investment managers have been anticipating this move in the markets for months, insuring client’s portfolios to not just protect them against the downside, but also allow them to participate in the eventual upside of this market correction.

To read more about Yorkville’s investment strategy and how we have responded to the recent market turbulence, please click here to read a piece by Yorkville's President, CEO and Chief Investment Strategist Hussein Amad.  

Click here for The Shake Down - Where Hussein Amad, President & CEO, gives his view of the market today and how Yorkville sees today's market as an opportunity. 

 

Click here for a strategy update by Yorkville's Deputy Chief Investment Strategist, Raphael Aronowicz, giving details on the benefits of Yorkville's use of a Zero-Cost-Collar.

Message from Hussein Amad, President & CEO – Yorkville Asset Management Inc. 

The markets have had a rocky week, and yesterday was a reflection of what had been anticipated by us for a while - with the S&P 500 selling off 2.23% (1.63 in CAD terms) and the TSX selling off 2.99%.  When we wrote to you last we highlighted three major shifts that helped our portfolio shelter this massive volatility. 

1.Increased cash going into the summer months.  We are roughly at 12 - 15%. Thus cash might be partially deployed on material weakness we expect to see in equity and bond markets. 

2.Reduced Canadian equities to the lowest level we can and favoured more defensive dividend paying (and dividend growing) U.S. stock. 

3.For clients that permit the use of options for hedging (insurance) we have increased the insurance coverage for the current summer months (May-September). 

These three strategies will help us and our clients maintain our strong alpha (outperformance) against our market benchmark and our peers. We are in a much more comfortable position in terms of our stock picks, asset mix, USD allocation and partial hedge than our peers and I wanted to convey this message on behalf of our investment committee to our clients and friends.

In 2011, we had a number of satellite trades that proved positive for our portfolios – taking advantage of shunned stocks, crack spreads, holiday seasonality and US Financials opportunities (please see below for a review of select satellite trades in 2011). While we are not accustomed to discussing individual trades, being a new company it gives our clients a preview of how active we are in managing risks and orchestrating investment themes within our portfolios.

HOLIDAY SEASONALITYchased Apple and Tiffany's

After a few years of sluggish holiday sales, we believed 2011 was the year consumers felt for the first time that the future may be brighter than it is today, leading to a more robust holiday spending season. We selected Apple and Tiffany’s as primary beneficiaries of increased holiday spending based on their market dominance in branding and product innovation. Unlike other retailers, Apple and Tiffany's do not need to cut prices and profitability to increase sales. They have positioned themselves as "must have brands" for the holiday season and are able to steal market share at premium prices, as opposed to discounted competitor prices. 

CRACK SPREADurchased Tesoro

We observe many derivate based indicators, one being the 3:2:1 Crack Spread - the spread a refiner can make by "cracking" crude into heating oil/gasoline. We observed that as the crack spreads were rising to multi year highs, refiners were lagging the indicator and therefore initiated a position in Tesoro. Tesoro has the added advantage of having the capacity to refine "heavy" oil relative to its peers. Heavy oil has become more prevalent in the market as cheaper, cleaner oils are being depleted and reserves are not being replaced.

SHUNNED STOCKhased Dendreon

Dendreon is a pharmaceutical company which recently won FDA approval for its novel prostate cancer therapy called Provenge. Provenge was a truly unique approach at cancer therapy as it was highly customized to each individual patient. While there was much hype for the treatment, as results started to flow in, the use of the therapy was much less than expected and the stock plummeted to levels seen prior to the drug being approved. Dendreon identified and committed to addressing the very unique issues hurting the drugs popularity (physician education, questions around Medicare reimbursement etc).

The extreme volatility of the stock provided opportunities to earn rich premiums in the options market. 

In 2011, we had a number of satellite trades that proved positive for our portfolios – taking advantage of shunned stocks, crack spreads, holiday seasonality and US Financials opportunities (please see below for a review of select satellite trades in 2011). While we are not accustomed to discussing individual trades, being a new company it gives our clients a preview of how active we are in managing risks and orchestrating investment themes within our portfolios.

HOLIDAY SEASONALITYchased Apple and Tiffany's

After a few years of sluggish holiday sales, we believed 2011 was the year consumers felt for the first time that the future may be brighter than it is today, leading to a more robust holiday spending season. We selected Apple and Tiffany’s as primary beneficiaries of increased holiday spending based on their market dominance in branding and product innovation. Unlike other retailers, Apple and Tiffany's do not need to cut prices and profitability to increase sales. They have positioned themselves as "must have brands" for the holiday season and are able to steal market share at premium prices, as opposed to discounted competitor prices. 

CRACK SPREADurchased Tesoro

We observe many derivate based indicators, one being the 3:2:1 Crack Spread - the spread a refiner can make by "cracking" crude into heating oil/gasoline. We observed that as the crack spreads were rising to multi year highs, refiners were lagging the indicator and therefore initiated a position in Tesoro. Tesoro has the added advantage of having the capacity to refine "heavy" oil relative to its peers. Heavy oil has become more prevalent in the market as cheaper, cleaner oils are being depleted and reserves are not being replaced.

SHUNNED STOCKhased Dendreon

Dendreon is a pharmaceutical company which recently won FDA approval for its novel prostate cancer therapy called Provenge. Provenge was a truly unique approach at cancer therapy as it was highly customized to each individual patient. While there was much hype for the treatment, as results started to flow in, the use of the therapy was much less than expected and the stock plummeted to levels seen prior to the drug being approved. Dendreon identified and committed to addressing the very unique issues hurting the drugs popularity (physician education, questions around Medicare reimbursement etc).

The extreme volatility of the stock provided opportunities to earn rich premiums in the options market. 

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Yorkville’s investment professionals discuss significant topics, issues and companies that are impacting the market today.

Our fixed income portfolios continue to be underweight credit and overweight duration with a US and Canadian dollar bias relative to the global benchmark. Our equity portfolios are positioned in a similar defensive fashion with material underweighted toward cyclical sectors such as industrials, energy, and materials, and material overweights in cash and consumer discretionary and staples, with a US bias relative to Canada.

The US Unemployment Rate peaked in 2009 at 10.1% and has since dropped to 8.5%. This is highlighted by many analysts as a sign of recovery. And it has been a sign of recovery in every business cycle in post-WW2 history…but not this time. The Participation Rate is the % of the population that is either working or looking for work. As the economy recovers, the Participation rate rises as people are encouraged to enter the workforce to find jobs. The Participation Rate peaked in 2000 at 65%. In this cycle it has fallen to 58% and has not moved higher as the Unemployment Rate has dropped. This has never happened in post-WW2 history. What is happening is workers are giving up looking for work in a dismal labour market and are no longer being counted as part of the labour force in the official employment survey. If the participation rate was assumed to have remained constant at 63% (average between 1988-2008) the Unemployment Rate would be closer to 12%, unchanged from 2009. In addition, those jobs that are being created are typically lower pay work with limited benefits.

Concerns over the possibility of Greece defaulting will continue to cast its shadow near term and volatility will rise and fall based on perceived outcomes. We tactically added to some current equity positions as markets sold off, however, we are only adding to conservative names which pay us dividends as we wade through the markets and are trading below their long-term historical valuations.

Longer term credit spreads are anticipated to widen relatively more than mid-term credit spreads (flattening government curve precipitating steepening credit curve) so desirable to reduce long credit exposure. Also desirable to reduce overall credit exposure based on weaker growth in US, Europe, Asia and even Canada.

We favour U.S. equities but still have a very negative view on the U.S. economy and we feel that this economic crisis will take longer to resolve than what policymakers are hoping for. We are looking to names that are fundamentally sound and have a better opportunity for outperforming during this cycle. We have also added to names that were already in our portfolio, some of which include Bank of America and Las Vegas Sands. This is consistent with our Shunned Stocks strategy.

Longer term credit spreads are anticipated to widen relatively more than mid-term credit spreads (flattening government curve precipitating steepening credit curve) so desirable to reduce long credit exposure. Also desirable to reduce overall credit exposure based on weaker growth in US, Europe, Asia and even Canada.