As part of the Capital Growth bucket, this fund is expected to deliver above average returns over time. The role of every security in the Capital Growth bucket is to achieve higher returns and through periodic rebalancing we use those returns to replenish any withdrawals and build up your cash reserves. 

Through regular review meetings with the Edgepoint team and all other Investment Partners, our goal is to make sure everything you own continues to fulfill the role we need it to.


An update from the Edgepoint Management team is a perfect follow up to the Fidelity Global Innovators Fund update sent earlier this week. In the Fidelity update, we highlighted that not every investment in your portfolio will be working for you at the same time. While both of these investments are in the Capital Growth bucket of your portfolio, they behave differently depending upon the investment environment and the timing of the investment cycle.

In 2020, Fidelity had a banner year with tremendous returns. In the same time period, Edgepoint ended the year flat. As mentioned above, different investment approaches will produce returns at different times. 

The Edgepoint investment approach is not deep value, Growth at a Reasonable Price (GARP), momentum or technically driven. What they do is invest the way a rational businessperson would approach buying a business. The rationale being that business owners seek to buy businesses whose cashflows can be materially higher down the road (growth), but also pay a price for the business that doesn’t discount these future cash flows (value). They believe favourable conditions exist in abundance today and if history is a guide, this should translate positively for investors with a long term focus.

In the December Quarterly Update from the Edgepoint Management Team, Portfolio Manager Andrew Pastor writes about how the team makes investment decisions. It's a long read but a good one, with interesting stories about the various ways an investment becomes a thesis idea and the work the team does before any investment makes it into their portfolio.

The full report can be found here.