Alex Ruus, portfolio manager at Arrow Capital Management 
Focus: North American equities
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MARKET OUTLOOK

Following a solid start to 2017, the second half of 2017 will likely see a continuation of the slow global economic recovery we have witnessed over the last several years, driven by growth from the world’s largest economies, the USA and China. Offsetting the solid economic growth somewhat will be more gradual tightening of monetary policy by the central banks. Unlike the last year, we are likely to experience some ups and downs during the coming year, as we encounter some partisan politics in the U.S. that will impede the new president’s actual policy implementation. Net-net, the overall economic backdrop should provide a good atmosphere for well-run leading companies (like the ones we own in the Leaders fund) to continue to build shareholder value. We look forward to another profitable year ahead of us.

TOP PICKS

MICROSOFT (MSFT.O)
The world’s largest software company and an emerging leader in commercial cloud services. The market is undervaluing this leader which has significant growth potential driven by the commercial cloud and its move to subscription and recurring revenues. The stock is undervalued, trading at 19 times earnings and a 2.3 per cent dividend yield. Last purchased February 2, 2016 at $53.51/share.

ELEMENT FLEET MANAGEMENT (EFN.TO)
A global leader in fleet management with the #1 position in North America, led by an experienced management team. The company has jumped into a void in the market following the 2008 downturn and has emerged as a new leader in the space. The company is undervalued at 9 times next year's earnings. Last purchased September 8, 2017 at $8.75/share.

UNITED PARCEL SERVICE (UPS.N)
The world's leading small package logistics company with a dominant position. UPS produces prodigious amounts of free cash flow and has a dominant market position. The stock trades at an attractive 17 times earnings and 2.8 per cent dividend yield. Last purchased February 21, 2017 at $107.52.
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
MSFT Y Y Y
EFN Y Y Y
UPS Y Y Y

PAST PICKS:  DECEMBER 5, 2016

ANTHEM (ANTM.N)

  • Then: $144.09
  • Now: $186.45
  • Return: 29.39%
  • Total return: 30.82%

FREEHOLD ROYALTIES (FRU.TO)

  • Then: $13.99
  • Now: $15.05
  • Return: 7.57%
  • Total return: 10.94%

MAGNA INTERNATIONAL (MG.TO) 

  • Then: $56.53
  • Now: $66.88
  • Return: 18.30%
  • Total return: 20.50%

TOTAL RETURN AVERAGE: 20.75%
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ANTM Y Y Y
FRU Y Y Y
MG Y Y Y

FUND PROFILE
Exemplar Leaders Fund - Class F
Performance as of: August 31, 2017

1 month: -1.60% fund, 0.67% index
1 year: 10.60% fund, 7.23% index
3 year: 3.36% fund, 2.10% index

*Index: S&P/TSX Composite
*Fund's returns are based on reinvested dividends and are net of fees

TOP HOLDINGS AND WEIGHTINGS

  1. Freehold Royalties: 6.18%
  2. Anthem: 6.17%
  3. Microsoft: 4.90%
  4. Element Fleet Management: 4.12%
  5. Magna International: 3.63%


TWITTER: @ArrowCapital
WEBSITE: www.arrow-capital.com