Portfolio management

Investment process

Risk averse philosophy is embedded in a process driven approach to investing.

Our process can be distilled into the following:

• Determine quality of the business, management and financials
• Estimate value drivers following analysis of the company and sector
• Evaluate risk factors and earnings sensitivities
• Calculate intrinsic value of the entity
• Determine a discount to intrinsic value before investing
• Wait patiently for the market to deliver our price to us.
• Goal is to be fully invested but are more than willing to hold cash when we cannot find enough investments that meet our criteria
• Hold a concentrated portfolio with a maximum of 35 names
• Limit investments to companies that meet our investment quality criteria
• Avoid quantitatively cheap business that do not have other significant positive industry, management, financial and governance attributes
• Focus on a company’s cash generation and capital productivity. Stewardship of free cash is critical

Our Model Portfolio will demonstrate how including a few well-chosen international and emerging market equities can enhance the returns on the portfolio while limiting risk. Our total international exposure is 20%, of which a portion is allocated to emerging markets in varying proportions.

Investment Returns

VAM’s primary return goal is to generate an absolute positive return in excess of inflation over a 3-5 year time horizon, i.e. an average market cycle.

• We believe that by focusing on quality companies we accrue attractive returns relative to benchmarks over the long term.
• The odds of earning superior returns improve by investing only when we purchase these quality companies at a discount to our estimate of its intrinsic value.

Implemetation, Access and accountability

• Assets held in clients name and protected by Canadian Investor Protection Fund (CIPF)

Cash and securities held by an independent custodian (Raymond James)

• Registered (RRSP & TFSA)/ Non-registered account opened at Raymond James Ltd.
• Cash or securities easily transferred from other banks or brokers
• Client has 24/7 online access to composition of portfolio
• Custodian sends monthly statements directly to client

Vulcan only has discretionary authority over portfolio allocation

• Vulcan allocates funds held in account to cash or securities consistent with its model portfolio(s)
• Vulcan has no ability to access amounts being transferred into or out of account
• Authority over deposits and withdrawals remains with the client

Vulcan sends quarterly updates to clients

• Performance summary
• Market views and portfolio commentary