This May Never Happen Again
September 6, 2018
Image used with permission: iStock/violetkaipa
This May Never Happen Again
As many of you know, my partners and I make it a practice to never lead with a discussion of investment performance. We are comfortable that the value of being a Nexus client stems from “controllable inputs” such as; planning, investment discipline, direct communication, customized service and hard work. Future investment returns, in contrast, are completely unknowable.
Notwithstanding this historical practice of being reserved about discussing performance, I wanted to draw your attention to a truly abnormal statistical development. In the latest Institutional Performance Report (July 31, 2018) from Global Manager Research©, the Nexus Income, Balanced and Equity Funds were in the top quartile for each and every period measured (Year-to-Date, 1-, 3-, 5-, 10-year). *
Now, we freely admit these surveys unavoidably mix fund strategies that aren’t perfectly comparable. For instance, our Equity Fund has had a long-term benefit due to our North American approach. Other managers in this sample would have not had the same degree of U.S. exposure that we do. Likewise, our Income Fund has invested in higher-quality bonds than many of our peers. That’s been a drag on performance which has been offset by our willingness to incorporate dividend-paying equities into the mix. By design and with intention, these differences are meant to produce better long-term performance. However, this also means that there will be some unevenness in results relative to other managers. So, we are not boasting about performance in this blog, rather we are drawing your attention to the statistical anomaly of being in the top quartile, for every period measured, for each of our funds. This may not happen again!
Our vision is to be one of Canada’s most respected investment counselling firms focussed on private clients and foundations. As we approach our thirty-year anniversary, we hope that goal remains realistic and achievable. Along the way, we have been supported by the trust of our clients, their referrals, and the work of expert sell-side professionals. We do feel that the survey results for 5-year and 10-year periods provide some independent validation that a disciplined, high-quality approach to investing makes a difference and we hope that will continue. For our part, all 19 of us who work together here will continue to focus on the aforementioned “controllable inputs”.
Finally, the coming years are likely to be challenging. If you think you might benefit from using a manager, or you are in a role where you are asked for referrals, I hope you’ll consider Nexus as a solution. GJG
* If you are thinking of the Sports Illustrated cover jinx, so are we!