CRESCENT SCHOOL INVESTMENT TEAM
The Year In Review Oct 2015 – April 2016 The Crescent School Investment Team (CSIT) is a student-run investment fund that invests in S&P/TSX 60 securities. Founded in 2012, the 2015-2016 school year was the fourth year of operations for the Investment Team. As in prior years, it served as a great learning experience. The Investment Team started the year with a cash balance of just over $22,500 thanks in large part to generous donations from the parent community. The Investment Team made its first investment before the Winter break and continued investing securities from January to April. After amassing 14 different holdings this school year, the Investment Team closed the year a touch below our starting capital. - Ronald Chow, Chief Marketing and Strategy Officer Portfolio Performance CSIT Portfolio
Starting Amount $22,732.91
Final Amount $22,672.68
$ Change -$61.83
% Change -0.27%
Investment Holdings and Capital Gains/Losses Holding
Magna International iShares Cndn Short Term Bond ETF Gildan Activewear Toronto-Dominion Bank Royal Bank of Canada Brookfield Asset Management Class-A Canadian National Railway Agrium Transcanada Corporation Crescent Point Energy Dollarama CGI Group Class-A Enbridge Suncor Energy
Quantity
30 473
Purchase Price per Share $57.51 $28.50
44 28 22 36 19 12 20 14 16 24 18 20
Date of Purchase
Sale Price per Share
Date of Sale
Total Sale Value
% Gain/Loss
Dec 11, 2015 Feb 16, 2016
Total Purchase Value $1,725.53 $13,480.50
$49.15 $28.35
Jan 20, 2016 Apr 29, 2016
$1,474.50 $13,409.55
-14.55% -0.53%
$33.50 $52.00 $67.62 $41.40
Feb 19, 2016 Feb 23, 2016 Feb 24, 2016 Feb 24, 2016
$1,474.40 $1,456.00 $1,487.64 $1,490.40
$38.15 $53.60 $72.73 $43.53
Mar 11, 2016 Mar 08, 2016 Mar 10, 2016 Mar 11, 2016
$1,678.60 $1,528.80 $1,621.84 $1,567.08
+13.89% +5.00% +9.02% +5.14%
$78.58 $118.20 $49.10 $17.00 $90.00 $62.05 $53.24 $36.20
Mar 10, 2016 Mar 11, 2016 Apr 05, 2016 Apr 05, 2016 Apr 29, 2016 Apr 19, 2016 Apr 19, 2016 Apr 21, 2016
$1,493.02 $1,418.40 $982.00 $238.00 $1,440.00 $1,489.20 $958.32 $730.95
$77.31 $108.37 $51.98 $19.64 $90.59 $57.72 $53.24 $36.20
Apr 29, 2016 Apr 29, 2016 Apr 29, 2016 Apr 14, 2016 Apr 29, 2016 Apr 29, 2016 Apr 29, 2016 Apr 29, 2016
$1,468.89 $1,300.44 $1,039.60 $274.96 $1,449.44 $1,385.28 $958.32 $730.95
-1.62% -8.32% +5.87% +13.44% +0.66% -6.98% +0.00% +0.00%
Dividend/Interest Payments Holding iShares Canadian Short Term Bond ETF iShares Canadian Short Term Bond ETF Brookfield Asset Management Class-A Gildan Activewear Agrium iShares Canadian Short Term Bond ETF Dollarama
Transaction Date Feb 29, 2016 Mar 31, 2016 Mar 31, 2016 Apr 04, 2016 Apr 21, 2016 Apr 29, 2016 May 4, 2016
Quantity 473 473 36 44 12 473 16
Total Amount $27.00 $26.98 $6.03 $4.44 $13.19 $26.30 $1.60
Portfolio Comment
During the 2015-2016 school year, the CSIT portfolio held 14 different holdings – four energy stocks, three financial stocks, four diversified stocks, two industrial stocks, and one cash-equivalent position. The biggest winners of the year were Gildan Activewear (+13.89%) and Crescent Point Energy (+13.44%), while the biggest losers were Magna International (-14.55%), followed by Agrium (-8.32%%) and CGI (-6.98%). iShares Canadian Short Term Bond ETF made up 60% of the portfolio from Feb 16 to Apr 29, and declined by 0.53%. Three interest payments managed to recover the capital loss; the adjusted calculation infers a 0.07% gain. - Ronald Chow, Chief Marketing and Strategy Officer
Investment Strategy The Investment Team Team focused on two goals this year – developing an investment strategy to adhere to, and also providing a unique educational experience for all students. The Team invested in stocks listed on the TSX 60 following a rigorous research and approval process. The development of the investment strategy started with sector allocation. Within the Investment Team, we had four sectors. The Energy, Financial and Industrial sector mirrored that of the TSX 60; the Diversified sector is a conglomerate sector of all other companies that didn’t belong to the other three. When determining how much money to allocate to each sector, we started with looking at the weighting of a sector by market capitalization in the TSX 60. We then allocated our portfolio accordingly across the four sectors, based on research and personal forecasts of sector performance. With oil continuing to push all-time lows in September and October, the Team decided to underallocate to the Energy sector, and accordingly adjusted the other three sectors. Sector Weightings Sector Energy Financial Industrial Diversified
TSX 60 19% 37% 15% 29%
CSIT 13% 40% 14% 33%
Over/under-allocation -6% +3% -1% +4%
We aimed to produce 15 pitches that accordingly invested in our sectors in appropriate amounts. The pitches focused on evaluating the line of business, micro and macro reasons for investment, the competitive landscape, as well as risk ratios and even ethics! We were challenged to strike a balance between maximizing our potential profits and minimizing the amount of risk we take. Arguably more important than the Investment Strategy was the aim to provide a unique experiential learning experience for all students involved, and hence developing greater knowledge regarding the financial world. It was a great experience this year for the Executive Team to disseminate their knowledge, and also continue to learn with the rest of the Investment Team. - Ronald Chow, Chief Marketing and Strategy Officer
CRESCENT SCHOOL INVESTMENT TEAM • THE YEAR IN REVIEW • 2 Websites: www.facebook.com/CrescentSchoolBusinessTeam/
www.issuu.com/crescentschoolbusinessteam/
Portfolio Performance
CSIT Portfolio vs. Crescent School Benchmarks We used two benchmarks to evaluate portfolio performance. The first benchmark, Crescent TSX 60 Benchmark (BM), tracks the performance of the TSX 60 with variable market capitalization, adjusted every few days. The second benchmark, Crescent Alternative Benchmark (XIU) is the Crescent TSX 60 Benchmark but adjusted for the time and amount the CSIT invests. The aim is to discount the cash balance of our portfolio to evaluate our investment choices. A simulated a portfolio was developed where, whenever we purchased or sold a stock in our CSIT portfolio, we would purchase or sell the same value of XIU, an iShares S&P/TSX 60 Index that seeks to provide long-term capital growth by replicating the performance of the S&P/TSX 60 index. - Ronald Chow, Chief Marketing and Strategy Officer
% Change - Term 1 % Change - Term 2 % Change - Term 3 % Change - 2015-2016
Portfolio *Blue Line* -0.18% +0.91% -1.00% -0.27%
TSX 60 Benchmark *Red Line* -0.35% +7.17% +7.58% +14.40%
Alternative Benchmark *Orange Line* -0.06% +2.22% +2.88% +5.04%
Comments The Team was slow to move money into the market this year; in fact, our portfolio consisted of cash and cash equivalents (XSB) for most of the year. This helped us at the beginning of the year when the market was declining; it also led to us missing out on significant gains in the market that started to materialize in midFebruary. While underallocating to Energy was a seemingly prudent decision in October, it ended up hurting us, as many of the best performing stocks on the TSX 60 were from the Energy Sector. - Ryan Boyd, Chief Operating Officer
CRESCENT SCHOOL INVESTMENT TEAM • THE YEAR IN REVIEW • 3 Websites: www.facebook.com/CrescentSchoolBusinessTeam/
www.issuu.com/crescentschoolbusinessteam/
Final Remarks The 2015-2016 school year was the fourth year of operations for the Investment Team, and served as another unique year. As it has done in the past three years, the Team introduced students to the vast world of finance, and without a doubt believe that members are well-prepared for a career in finance should they choose that path. Our portfolio experienced negative returns and underperformed our benchmarks, a stark contrast when compared previous years (Year 1 – negative return but outperformed the benchmark; Year 2 – positive returns but underperformed the benchmark; Year 3 – both positive returns and outperformed the benchmark). Our 14.5% underperformance of the benchmark afforded this year’s team with one of the most vivid learning experiences in Investment Team history. Members were able to observe the effect of large cash balances, as well as potential repercussions of an “incorrect” investment strategy. These important lessons will hopefully remain with all team members, and will be incorporated into discussions regarding future plans. This past year has been a great learning experience. Best of luck to next year’s Investment Team. - Ronald Chow, Chief Marketing and Strategy Officer To me, the business program has been and always will be about differentiating our grads and better equipping them to succeed in both the business world and everyday life. To have a tangible, real money portfolio makes Crescent School’s Investment Team unique to any high school. Saying that leading this team as CEO was an honour would be an understatement. I have had the opportunity to work along side some incredible and talented peers, both teaching and learning from each other. I am grateful to have able to take part and impact the younger members learning by giving lessons or helping them in creating their own investment pitch. This Team, however, cannot function without the generous support of our family donors, the Investment Committee, and our three teacher supervisors. Thank you all, for everything that you have done; we cannot fully express our true gratitude. It has been a great year, and I am eager to witness the Investment Team progress in the future. I hope this program continues to grow and prosper, and wish great success to next year’s Team. - Jordan Abramsky, Chief Executive Officer
Executive Team Jordan Abramsky, Chief Executive Officer Ryan Boyd, Chief Operating Officer Ronald Chow, Chief Marketing and Strategy Officer Jake Erdman, Portfolio Manager (Financial Sector) Josh Limpert, Portfolio Manager (Energy Sector) Ryley Mehta, Portfolio Manager (Industrial Sector) Christian Metivier, Portfolio Manager (Diversified Sector) Mr. Gavin Muranaka, Faculty Advisor Mr. Michael Stephens, Faculty Advisor Ms. Mita Bhattacharyya, Faculty Advisor
CRESCENT SCHOOL INVESTMENT TEAM • THE YEAR IN REVIEW • 4 Websites: www.facebook.com/CrescentSchoolBusinessTeam/
www.issuu.com/crescentschoolbusinessteam/