| Monthly Message | |
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September was a weak month for the major market indices. The S&P 500 was down 7.0%, the DJIA down 5.9%, the NASDAQ down 6.4%, the S&P/TSX down 8.7%, while the BMO Small Cap Index was down 11.4%. The Wutherich & Co. Composite was down 4.0% during the month. We are now reporting a 10 Year number for the Wutherich & Co. Composite. The chart below indicates that you would have made just under four times your money with Wutherich & Co. over the last 10 years versus just over two times if you had invested in the S&P/TSX Index and just under three times in the BMO Small Cap Index. Amongst Canadian large cap stocks, eight of ten sectors finished down with only Utilities and Consumer Staples in positive territory. Heavy losses occurred in the Energy, Materials and I.T. sectors. In Canadian small cap stocks, nine of ten sectors finished down with Telecom being being flat on the month. Exceptionally heavy losses occurred in Energy and Materials. Fear continues to drive stocks. With no resolution to the European debt crisis and its potential spill over effect into the rest of the global economy, share prices gyrate wildly on every shred of news. We believe that we should be greedy when others are fearful and so have been adding to existing positions while looking at new names for the portfolio. We may be early by months or even years, but crises like this tend to create opportunity for patient, long-term investors. We think our names have better than average characteristics and should be able to hold up relatively well in what could be a tough environment for growth. |
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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. | -4.0% | 9.7% | 5.9% | 6.8% | 14.0% | 14.0% |
| BMOSCI-wtd | -11.4% | -2.3% | 12.6% | 3.3% | 11.1% | 11.1% |
| TSX | -8.7% | -3.6% | 2.7% | 2.6% | 8.0% | 8.0% |
| 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 | 72.84% | |
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Energy | 10.89% |
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Financials | 5.16% |
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Information Technology | 0% |
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Communications and Media | 3.99% |
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Consumer | 11.58% |
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Healthcare | 6.59% |
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Industrials | 20.79% |
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Materials | 4.77% |
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Telecom | 0% |
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Transportation | 9.09% |
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Utilities | 0% |
| U.S. Stocks | 15.30% | |
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Communication Services | 5.36% |
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Energy | 5.15% |
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Specialty Retailers | 4.79% |
| Cash and Others | 11.86% | |
| 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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