| Monthly Message | |
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November was a mixed month for the major market indices. The S&P 500 was down 0.2%, the DJIA up 1.2%, the NASDAQ down 2.4%, the S&P/TSX down 0.2%, while the BMO Small Cap Index was down 1.5%. The Wutherich & Co. Composite was up 7.0% during the month. Let us crow while we have the chance! Our mutual fund, The Steadyhand Small Cap Equity Fund, which is run the same as the Wutherich & Co. Composite, is at the top of the heap for the small to mid-cap space! Morningstar, the fund rating agency, has us at 1 percentile (among the top one percent of managers in this category) for one month, year-to-date and last twelve months for the periods ended ended November 30, 2011. But, as we remind people, today’s hero, tomorrow’s bum, though if you are any good at what you do, you could very well be the next day’s hero again. Amongst Canadian large cap stocks, the ten sub-indices finished mixed with Healthcare posting the strongest gain while Information Technology and Financials suffering the biggest losses. Canadian small cap stocks displayed a similar pattern with Energy and Materials stocks showing the largest declines. The markets were in deep, negative territory for much of November, a blow softened by a huge rally on the very last day of the month. We hear a lot about how closely correlated stocks are these days and indeed, this seems to be the case. Stocks seesaw up and down together in huge daily swings. We think: If all the kids are on the seesaw together, time to find something else to do in the playground. We tend to have a very low correlation to either the market indices or our competitors and we do this with less volatility. Clearly, we are doing something different and the results have played out over time. While we won’t be able to out-swim a tsunami if one should arrive, we think that most of our companies are better equipped to survive than most. |
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The following table illustrates the performance of the Wutherich & Co. Composite to the present: |
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(unaudited, since Sep.30/01)*
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| Month | 1YR | 3YR | 5YR | 10YR | Inception | |
| Wutherich & Co. | 7.0% | 15.3% | 19.1% | 7.6% | 13.3% | 15.0% |
| BMOSCI-wtd | -1.5% | -7.0% | 30.9% | 3.3% | 10.8% | 11.6% |
| S&P/TSX | -0.2% | -3.3% | 12.8% | 2.0% | 7.6% | 8.4% |
| Wutherich & Co. Factsheet | |
| Company Objective | |
| Our goal is to seek prosperity for our clients through participation in stable, growing companies in North America, led by strong management teams that we consider our partners for the next five or more years. | |
| Investment Philosophy | |
| Our style can be described as concentrated, disciplined, long-term growth stock investing. The focus is on established companies that generally have a demonstrated track record in revenue, cash flow or earnings per share growth, with strong managements and solid balance sheets. The current emphasis in the portfolio is on the equity of small to medium capitalization companies, defined roughly as $50 million to $5 billion in market capitalization. The portfolio may include large capitalization companies if the right elements are there. Stocks are bought with a keen eye to valuation, so you’re not likely to find many high multiple stocks here. The portfolio will likely maintain a significant percentage in foreign securities, providing exposure to investment returns outside of Canada. | |
| Portfolio Composition (as a percentage of net assets) | ||
| Canadian Stocks | 73.69% | |
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Energy | 12.71% |
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Financials | 0% |
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Information Technology | 0% |
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Communications and Media | 3.45% |
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Consumer | 14.05% |
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Healthcare | 6.56% |
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Industrials | 22.64% |
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Materials | 5.36% |
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Telecom | 0% |
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Transportation | 8.92% |
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Utilities | 0% |
| U.S. Stocks | 17.75% | |
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Communication Services | 5.40% |
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Energy | 6.71% |
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Specialty Retailers | 5.64% |
| Cash and Others | 8.56% | |
| Performance | ||||||||||
| (unaudited, the growth of $100,000 invested as at Sep. 30/01)* | ||||||||||
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| Your account with us | ||||||||||
| Wutherich & Company is an independent investment counsellor. We do not hold assets for our clients, but simply exercise trades over your account as per an agreed upon investment policy statement and portfolio management agreement. Your account is held at TD Waterhouse Canada Inc. in your name. Withdrawals from that account can only be sent to you at your designated bank account and/or address of record. Wutherich & Co. may also do withdrawals from your account to satisfy any fees that may apply to your account. All accounts are cash accounts. Unlike hedge funds, we do not use leverage or derivatives to manage your money. Also, we are not a fund company – if you are a private investor with us, your account will mirror the Model Portfolio but your investments are not pooled. | ||||||||||
| Other Facts | ||||||||||
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*The Wutherich & Co. performance shown here is of a composite which combines the performance of all of the accounts managed by Wutherich & Co. that have been invested according to the Wutherich & Co. Portfolio throughout their history. These accounts vary greatly in the size of assets that they contain and whether or not fees have been deducted directly from the accounts during their history. BMOSCI-wtd = BMO Small Cap Index, Total Return, weighted. This index is currently the most comparable to the Wutherich & Co. portfolio due to its average market capitalization, though it may differ greatly in its sector weightings; TSX = S&P/TSX Total Return Index. Due to its large capitalization nature and substantially different sector weightings, this index may not be considered comparable to the Wutherich & Co. Portfolio. |
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