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 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.

Press Releases

Yorkville Asset Management Inc. is pleased to announce the 2018 performance of their funds. Three of the funds finished the year with a first quartile performance, according to MorningStar. In addition, three of the funds outperformed their respective benchmarks for the year. 

To read the full press release, please click here.

Senior management appointments have been announced by Southbridge Care Homes to support the tremendous growth experienced in the business, and to provide a foundation for its continued expansion into the future.

To read the full press release, please click here.

The Southbridge Health Care GP Inc. Board is pleased to announce the appointment of Nick DiRenzo and Hussein Amad to the Board of Directors.

To read the full press release, please click here.

Yorkville Asset Management Inc. announces risk rating changes to the following funds:

  • Yorkville Enhanced Protection Class
  • Yorkville Canadian QVR Enhanced Protection Class
  • Yorkville American QVR Enhanced Protection Class
  • Yorkville Health Care Opportunities Class
  • Yorkville Global Opportunities Class

To see the new risk ratings and to read the full press release, please click here

Distributions are required to pass-through the taxable gains and income generated by the fund over the past year.

As is the case with the majority of our mutual fund investors, if these distributed amounts are not taken as cash, they are simply reinvested in the form of new shares of the respective fund series. As is the industry standard, to keep the overall value of a client’s account in equilibrium, the value of the brand new shares added to a client’s account will result in a corresponding reduction of the NAV of each share of the fund after the distribution is complete.

 For taxable (open) accounts, distributions on March 28th, 2018 will generate a tax slip generated in January / February of 2019. For registered accounts, like RRSPs and others, no tax slips will be generated as a result of these distributions.

Please find the March 28th, 2018 distributions information here. If you have any questions, please don't hesitate to contact us.

With approval from the Ontario Ministry of Health and Long Term Care, Southbridge Health Care LP, and the Yorkville Long Term Health Care Fund have finalized  the acquisition of three long term care homes in Thunday Bay. 

Yorkville continues to work to provide our clients with stable yields and access to markets that’s aren’t otherwise available. We are pleased with this acquisition and the projected accretive returns for our investors.  

For more information and to read the full press release, please click here

Yorkville celebrates the 5-year anniversary of the Yorkville Long Term Health Care Fund.

For more details and to read the press release in full, click below:

Yorkville Asset Management Inc. Celebrates 5-Year Anniversary of the Yorkville Long Term Health Care Fund

Yorkville's Global Opportunity Class mutual fund was raised to a 5-star rating by the prestigious fund analytics firm Morningstar Inc. 

For more details and to read the press release in full click below: 

Global Opportunities Class Fund Earns 5-star Morningstar Rating

Yorkville Asset Management Inc. has added two new equity products to its investment solution suite. The Yorkville Canadian QVR Enhanced Protection Class and Yorkville American QVR Enhanced Protection Class expand Yorkville’s core mutual fund offerings to include geographically specific equity exposure for its clients.

For more deatils, and to read this press release in full please click below:

Enhance your portfolio with Yorkville’s two new equity solutions

Yorkville Asset Management Inc., a proud supporter of numerous organizations across Ontario, formalized its support of Trillium Health Partners Foundation (formerly The Credit Valley Hospital Foundation and Trillium Health Centre Foundation) this week. Over the next three years, Yorkville has committed to becoming the VIP reception sponsor at Credit Valley Hospital Foundation’s five-star Laugh out Loud event, ending 2016.

For more information, and to view this announcement in full, please click below:

Yorkville Asset Management Inc. solidifies its support of the Credit Valley Hospital Foundation

 

 

On May 1, 2013, Yorkville announced the forging of an exciting new relationship with Aegon-owned company World Financial Group (WFG). A leading financial services organization in North America, WFG and its thousands of independent advisors offer financial services and solutions from top product providers to individuals and families from all walks of life. Yorkville could not be more pleased that we have been chosen as one of WFG’s product providers, and together we have embarked on an ambitious $1-billion campaign. Please see the attached news release for further details.

If you have any questions regarding the company or the attached information, please don’t hesitate to contact Jillian Wade at jwade@yorkvilleasset.com or 647-776-2007

Yorkville Asset Management Inc. added to WFG platform

Yorkville is pleased to announce that the first quarter results of the Southbridge Health Care Fund have been published (please follow the link below). This was the first full quarter the fund has been in operation and results are exceeding expectations. If you are interested to learn more, please contact Ralph Desando at rdesando@yorkvilleasset.com or 647-776-7481.

Southbridge Health Care Fund First Quarter 2013 Update

 






NEWS RELEASE

Toronto, ON, November 13, 2012

Southbridge Health Care LP announced today the successful acquisition of two long-term care homes in Ontario by its wholly owned subsidiary, CVH (No. 1) LP.  The acquired homes are Craiglee Nursing Home in Scarborough and West Park Health Centre in St. Catharines. Together these initial two homes have a capacity of 270 residents. They are the first homes to be acquired by Southbridge Health Care LP as part of its strategic plan to acquire and re-develop long-term care homes throughout the Province of Ontario.  Southbridge Health Care LP is managed by Southbridge Health Care GP Inc., a wholly owned subsidiary of Southbridge Capital Inc.

“These homes are the inaugural acquisitions for Southbridge Health Care LP and mark the launch of the Southbridge Healthcare Fund in the long-term care sector. It is a very exciting milestone for us” indicated Michael Petersen, the President of Southbridge Health Care GP Inc. and Southbridge Capital Inc. and a representative of the Southbridge Health Care Fund.

Southbridge Health Care LP is set to acquire four more long-term care homes later this month. The four homes will have 199 residents in total.  A seventh acquisition is already under contract and expected to close in February of 2013, pending Ministry of Health and Long-Term Care license transfer approval, which will add an additional 96 residents to the Southbridge Health Care LP community. An eighth acquisition is presently under negotiation and is expected to close in July 2013 which will bring an additional 104 residents into the Southbridge Health Care community.    

Southbridge Health Care LP is a Canadian owned and operated partnership whose mission is to acquire long-term care homes in Ontario and, where appropriate, re-develop them under the Country Village Homes™ brand.  Southbridge Health Care LP is guided by the belief that long-term care residents should remain connected to their communities while receiving individualized quality care in a residence that they can truly call their home.

To ensure that the level of care provided in all of Southbridge Health Care LP’s long-term care homes is of the highest standard, it has chosen Extendicare (Canada) Inc. – a recognized leader in quality and clinically-based services – to manage all aspects of the homes both before and after their re-development.

“Now that the required approvals from the Ministry of Health and Long-Term Care to transfer the licenses for the homes are beginning to be received and the acquisition process has begun, we can now turn our attention to assessing the acquired homes for re-development and, with Ministry approval, re-develop them to new standards under the Country Village Homes brand” says Keith McIntosh, President of the Healthcare Division of Southbridge Group LP.

“The development and launch of the Southbridge Health Care Fund has been key to ensuring the success of Southbridge Health Care LP’s strategy to acquire and re-develop long-term care homes” says Michael Petersen.  “Southbridge Health Care Fund, together with Southbridge Capital Inc., brings together like minded investors who wish to gain access to investing in the long-term care sector in Ontario, a sector that has historically been a difficult one to gain access to due to the heavily regulated nature of the industry.”

For more information, please contact: Richard Franzke, Director of Marketing and Communications, Southbridge Group LP at 519-621-8886.

About Southbridge Health Care Fund

Southbridge Health Care Fund is an open ended mutual fund trust that seeks to acquire and re-develop long-term care homes in the Province of Ontario.  For more information about the Southbridge Health Care Fund or to purchase units, please contact

Yorkville Asset Management Inc.
55 University Ave., Suite 704,
Toronto, Ontario, M5J 2H7
Tel: 647.776.7481
Fax: 647-776-7490
rdesando@yorkvilleasset.com

About Country Village Homes

Country Village Homes is a trademark of Southbridge Group LP and is used under license for the long-term care homes being acquired, managed and redeveloped by Southbridge Health Care LP and its wholly owned subsidiaries.

About Southbridge Capital Inc.

Southbridge Capital Inc. is a Canadian owned asset manager focused on the development of investment opportunities in the Long-Term Care sector. It is the founder and promoter of the Southbridge Health Care Fund. For more information about Southbridge Capital Inc. visit www.southbridgecapitalinc.com

About Southbridge Group LP

Southbridge Group LP is responsible for researching and acquiring long-term care homes for Southbridge Health Care LP and for re-developing long-term care homes for it under the Country Village Homesbrand. For more information about Southbridge Group LP visit www.southbridgecapitalinc.com

About Extendicare (Canada) Inc.

Extendicare (Canada) Inc. is a Canadian company that operates 86 long-term care and continuing care centres across Canada.  The Extendicare Assist Division manages 26 homes on behalf of 16 partners. For more information visit www.extendicareassist.ca.

 

TO: All Clients and friends
DATE: October 1, 2012 

We are pleased to announce the appointment of Mr. Steve Conrad as Managing Director, Institutional & Private Wealth for Yorkville Asset Management's first Ottawa branch located at 45 O'Conner Street, Suite 1150

Before joining Yorkville, Steve held senior level business development and sales management roles from 2000 to 2012 in the Ottawa and Eastern Ontario market, including PriceWaterhouse Coopers LLP, Robert Half Management Resources and Business Development Bank of Canada. 

Earlier in his career, Steve spent five years with Grant Thornton LLP, both in Halifax and Bermuda, where he earned his CPA designation and subsequently moved into private industry, where he held progressive senior finance roles in both the Caribbean Rim and the UK.

Steve is actively involved the Ottawa community, including the Economic Development Committee of the Ottawa Chamber of Commerce, Ronald McDonald House charities and the Queensway Carleton Hospital Foundation.

Please join me in welcoming Steve to Yorkville’s management team. Steve can be reached at (613) 751-3770 or via e-mail at sconrad@yorkvilleasset.com

Regards,
Hussein Amad President & CEO

Toronto Rehab Foundation is proud to partner with Yorkville Asset Management Inc., evening sponsor of the Harvey’s Back Gala. Yorkville is a client-focused investment firm that offers portfolio and wealth management, financial planning and related advisory services to institutional and accredited investors. They are committed to philanthropic contributions to organizations that are important to them, and that mirror their philosophy and values, like Toronto Rehab.  

Their team of experts tailors investment solutions to meet immediate and long-term financial client needs. They offer access to a full complement of traditional and non-traditional asset classes, through segregated portfolios and mutual funds. By combining best-in-class analytics with insight and ongoing communication with clients, Yorkville’s investment professionals have the experience to provide effective solutions to meet the complex needs of sophisticated investors. 

They are an investment firm that sees every client as unique, echoing Toronto Rehab’s individualized treatment plans for each patient we see. Yorkville believes in discovery through analysis, like Toronto Rehab focuses on discovery. By treating clients as partners in the investment management process Yorkville mirrors how Toronto Rehab collaborates with patients and families to maximize the health care experience.

“We support Toronto Rehab because of their innovative work in stroke rehabilitation. Harvey Strosberg’s incredible recovery is a wonderful example of the vital services Toronto Rehab provides. Harvey overcame incredible challenges through personal determination, but it simply could not have been possible without the exceptionally compassionate and dedicated care he received at Toronto Rehab. The Harvey’s Back Gala was a wonderful celebration of rehabilitation and hope. We were very pleased to partner with the Foundation to help add years to the lives of countless patients.”
– Hussein K. Amad, President and CEO.

Toronto Rehab Foundation is immensely grateful to Yorkville Asset Management for their leadership and support of our successful Harvey’s Back Gala.

STAFFING ANNOUNCEMENT

TO: All Clients and friends
DATE: November 9, 2011

We are pleased to announce the appointment of Mr. Paul Hansen as Managing Director, Structuring & Sales for Yorkville Asset Management. We have known Paul for many years and successfully partnered with him and his team at both CIBC and Merrill Lynch and are happy that he is now part of our team.

Paul was most recently at Bank of America Merrill Lynch Canada where he was head of their Structured Solutions Group. Paul successfully grew BoAML’s HNW practice by developing innovative bespoke tools that helped clients achieve their investment goals.

Before joining BAML, Paul was at CIBC from 2000 to 2009 and during that time he held senior positions in Structured Products Structuring and Distribution. Paul was integral part of the development of the bank’s structured product strategy and managed the rapid growth of the deposit base through the issuance of cross asset / market linked GIC’s and principal protected notes.

Prior to that, Paul earned his CA designation while at Arthur Andersen LLP, where he was a risk management consultant for derivative groups at financial institutions.

Please join me in welcoming Paul to Yorkville’s management team. Paul can be reached at (647) 776-7482 or via e-mail at phansen@yorkvilleasset.com

Regards
Hussein Amad President & CEO

Fund Commentary

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 SEASONALITY

Purchased Apple & 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 SPREAD

Purchased 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 STOCK

Purchased 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.