The Norrep Q Class is designed to achieve long-term capital appreciation by investing in large and mid capitalization Canadian equities. It follows a quantitative approach with a fundamental overlay to ensure that the portfolio maintains the attributes that have historically outperformed the market.
Please note that effective August 28, 2007 the following fund codes were amalgamated:
NRP303 became NRP301
NRP304 became NRP302
Please call Patrick Chu or Mila Belic at 877-431-1407 if you have any questions.
Momentum at a Reasonable Price
We begin our investment process by screening hundreds of securities for earnings and price momentum. Having screened these securities, we apply a value overlay to reduce our universe to approximately 100 names. From this universe, we construct a portfolio with a low P/E multiple, high ROE, high yield, reasonable debt level, and strong momentum characteristics. Our stringent screening process identifies securities that satisfy our desired parameters and ensures that we do not overpay for momentum. What differentiates the Norrep Q is our quantitative approach; we target momentum at a reasonable price rather than momentum at any price.
Preservation of Capital
One of the primary objectives of the Norrep Q Class is the preservation of capital, which gives the portfolio a strong value bias and one of the lowest P/E multiples of any fund in the country. Despite the value bias, growth is not sacrificed as the Norrep Q Class often has a ROE of at least twice its P/E. This approach limits downside risk, while still providing significant upside potential.
Emphasis Placed on Portfolio Attributes
The Norrep Q focuses on generating "measurably superior" performance by populating the portfolio with equities that have the greatest probability of success based on back-tested numerical attributes that have historically outperformed the market. Some of these attributes include P/E ratios, ROEs, debt-to-equity ratios, momentum factors, and expected yield.
Removes Emotion from the Investment Process
History shows that a quarterly earnings surprise, be it positive or negative, is usually followed by another earnings surprise in the same direction. When a company misses analyst expectations, we immediately sell our position because negative earnings surprises generally indicate deteriorating characteristics and lead to further shortfalls in earnings. We intuitively do not like story stocks with management promises of future growth hence this enables us to avoid potentially large losses when expectations are not met. With quantitative analysis, the investment decisions are based on a company's reported numbers and not their expectations; thus, removing emotion from the investment process. Generally speaking, if a company is not posting good numbers at the present time, we will not own it in the Norrep Q.
Distribution Information
Eligible Dividend Designation
The Norrep Group of Funds advises that any dividends paid by Norrep Opportunities Corp. (NII Class, Norrep Q Class, Norrep Income Growth Class, Norrep US Class and Norrep G Class) are designated as eligible dividends" for Canadian Income Tax purposes, unless otherwise stated.
Current Year Distribution
The distribution noted to the left is the total distribution amount for the year. This distribution may consist of capital gains dividends and regular dividends. For the 2007 taxation year the distribution per share for the Norrep Q Class is comprised of the following: $0.98 capital gains dividend and $0.20 eligible dividend.
