Integra Canadian Value Growth Fund - As at June 30, 2021
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Semi-Annual Management Report of Fund Performance Integra Canadian Value Growth Fund As at June 30, 2021 This semi-annual report of fund performance contains financial highlights but does not contain the complete semi-annual financial statements for the investment fund. You may request a copy of the semi-annual financial statements at no cost, by calling 1-800-363-2480, by writing to us at Integra Capital Limited (“Integra”), 130 King Street West, Suite 1500, P.O. Box 424, Toronto, Ontario, M5X 1E3 or by visiting our website at www.integra.com or the SEDAR website at www.sedar.com. Security holders may also contact us using one of these methods to request a copy of the Fund’s proxy voting policies and procedures, proxy voting disclosure record, or portfolio disclosure relating to the Fund.
Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Investment objective and strategies rigorous application of company analysis and superior investment
fundamentals. Company characteristics such as free cash flow
The Integra Canadian Value Growth Fund seeks to provide long- generation, capital allocation, quality of the business model and
term capital growth by investing primarily in equity securities of management should triumph in the long run.
Canadian businesses. The Fund may hold up to an aggregate of
10% in cash or cash equivalents. Another risk that equity investors should be cognizant of is
valuation risk. The recent waves of global monetary and fiscal
The Fund is sub-advised by two investment teams: a “core stimulus released by central banks in a coordinated effort to
enhanced” manager and a quantitative core manager. battle the economic impacts of COVID-19, have entered the
The Fund will not invest in foreign securities. Each manager is markets and have pushed stock market valuations higher. Price-
authorized to keep a percentage of the assets it manages in cash to-earnings multiples have expanded causing stock prices to rise
or cash equivalents as an ongoing strategy. without a commensurate increase in earnings and certain areas of
the equity market have become richly valued. There remains a risk
Risk that the market could see a near term pullback if price to earnings
multiples were to contract to historic norms.
Most of the Fund’s assets will be invested in common shares. As a
result, the Fund is exposed to stock market risk and specific issuer As at June 30, 2021, one unitholder held approximately 41.2% of
risk. Equity risk can be described as the potential for a decline in the outstanding units of the Fund. The purchase or redemption
stock prices. The share price of a company will be impacted by of a substantial number of securities of the Fund may require
various factors including profit growth, dividend policy, balance the manager to change the composition of the Fund’s portfolio
sheet leverage, quality of management, market share, product significantly or may force the Fund’s sub-advisors to buy or sell
development, and technology investment. investments at unfavourable prices, which can affect the Fund’s
return.
The Integra Canadian Value Growth Fund may enter into securities
lending transactions. Securities lending transactions will be used
Management discussion of fund performance
in conjunction with the Fund’s other investment strategies in an
appropriate manner to achieve the Fund’s investment objectives.
Accordingly, it may be subject to securities lending risks.
Results of operations
For the quarter, six-month and one-year periods ended June 30,
The impacts of COVID-19 continue to pose a significant risk
2021, the Fund gained +7.2%, +16.6% and 32.8% respectively. In
for equity investors. There are a few different forms of risk to
comparison, the Fund’s benchmark (100% S&P/TSX Composite)
the equity markets from the impact of the ongoing pandemic:
returned +8.5%, +17.3% and +33.9% for the same periods. All
1) Market and Economic Risk, 2) Tracking Risk, 3) Short Term
of the returns are presented in Canadian dollar terms and gross of
Volatility Risk. Throughout the first half of 2021, we saw two
investment management fees.
general competing themes in equity markets around COVID-19 –
the re-opening theme and the work-from-home theme. COVID-19 The Canadian equity market as represented by the S&P/TSX Index
and its variants can have a dramatic impact on the future outlook posted a strong first half of 2021 but the market did not move
for economic and market risk. The types of stocks rewarded in a straight line. The market responded strongly to the stimulus
under the re-opening theme (cycle and value stocks) are very provided by central banks and governments, despite uncertainty
different than those rewarded under the work-from-home theme around inflation, but leadership began to rotate late in the second
(large cap growth stocks). As the new ebb and flow between the quarter as the impact of COVID-19, the delta variant and a fourth
potential for a return to normal with businesses opening back up wave began to capture investor attention.
and the potential impacts of a fourth wave from the delta variant,
the market can be expected to experience a higher degree of Canadian economic data was mixed through the first half of 2021,
short-term volatility. The often leads to a fast rotation between with inflation prints surpassing expectations, employment figures
themes and stock market leaders, which in turn can lead to higher that started the 2nd quarter strong but missed expectations
degrees of tracking error risk in the short term – as the path towards the end of the quarter, and GDP prints that were slightly
and transmissibility of the virus is often difficult for investment weaker than expected. U.S. economic data was mixed as well,
managers to accurately predict. This ebb and flow can impact with inflation prints stronger than expected, GDP figures in line
investors returns in the short run, but we continue to believe that with expectations, and employment prints were weaker than
longer term investment success comes from the continued and expected.
Page 2 of 8Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Overall, the Integra Canadian Value Growth Fund finished the first Recent developments
half of 2021 strong in absolute terms, despite the push and pull
effect as the significant fiscal and monetary stimulus supported We will be making some enhancements to the Integra Canadian
the building economic and earnings recovery against the backdrop Value Growth Fund in the second half of 2021. In July, Integra
of the potential for increased COVID-19 cases and a delayed pace Capital Limited will be replacing State Street Global Advisors
of vaccination. In absolute terms, the Integra Canadian Value (SSgA) as a sub-advisor to the Integra Canadian Value Growth
Growth Fund was up (+16.6%). The Fund had been keeping pace Fund. The new investment manager will be Galibier Capital
with the benchmark up until the end of May, as the reopening Management Ltd. (“Galibier”). Galibier’s investment strategy,
and reflation trade that was dominant in Q1 continued into April style and methodology align with the mandate of the Integra
and mid-May causing cyclical stocks and value stocks to work Canadian Value Growth Fund. We are confident in our selection
well. After mid-May, yields began to fall as the market started to of Galibier as a complementary investment manager alongside
anticipate the removal of COVID stimulus as economic growth AGF Investments.
rose at the fastest pace seen in decades. The market narrowed Galibier’s investment philosophy is valuation driven with their
and investors rotated into more growth-oriented pockets of the portfolio construction process consisting of a bottom-up, stock-
market, causing many cyclical and value stocks to underperform by-stock selection strategy. Galibier defines their investable
for the quarter as a whole. The information technology sector universe by screening equities using the following parameters:
represented 85% of the index return in June. As a result, the Fund competitive advantage, high cash flow, management with a
lagged its benchmark in June with the sharp rotation in market record of good governance and maximizing shareholder value,
themes and market leaders. above average long-term growth prospects, and appropriate
In the first half of 2021, we saw 10 out of the 11 sectors in financial leverage. Galibier uses fundamental research to assess
the S&P/TSX Composite deliver positive performance, with five a defined investable universe of stocks through a comprehensive
sectors delivering performance in excess of +20%. The Integra research process using the above-mentioned criteria to identify
Canadian Value Growth Fund added value in 4 out of those those opportunities where a stock is trading below its intrinsic
11 sectors but lagged notably in the Information Technology value.
sector as the result of being primarily underweight in one stock,
Shopify, which made up 7.06% of the index. The two biggest Caution regarding forward-looking statements
detractors to performance relative to the benchmark was the This report may contain forward-looking statements about the
result of stock selection in the Information Technology Sector Fund, including its strategies and expected performance. Forward-
where the aforementioned underweight to Shopify (up +37% in looking statements include statements that are predictive in
the second quarter) had a significant impact; and stock selection nature, that depend upon or refer to potential future events or
in the financial sector where the ‘lifecos’ – Manulife and Sunlife market and economic conditions.
also detracted. Positive contributors to the Fund included stock
selection in the Materials sector where an underweight to the In addition, any statement that may be made concerning future
sector and stock selection favouring an overweight in fertilizer performance, strategies or prospects and possible future Fund
stocks in the sector added value; and stock selection in the action, is also a forward-looking statement. Forward-looking
Industrials was also a positive contributor to active performance. statements are based on current expectations and projections
about future events and are inherently subject to risks,
Looking forward, the market is likely to continue to be volatile and uncertainties and assumptions about the Fund and capital market
reactive to concerns over the path of the virus and inflation. While and economic factors.
the economy remains strong overall, the Fund is still positioned
in the more cyclical sectors versus the defensive sectors, but it is Forward-looking statements are not guarantees of future
incrementally adding to higher quality value and growth stocks performance, and actual events and results may differ materially
with lower volatility as the uncertainty about the impact of from those expressed or implied in any forward-looking
COVID-19 remains. At the time of writing, investors should note statements made by the Fund. A wide range of factors may
that Canadian equity valuations are currently rich on average contribute to these variances, including general economic,
as there is a tremendous amount of stimulus in the market, so geopolitical and market influences in Canada or globally, interest
Canadian equity investors should remain somewhat cautious for rates and currencies, capital markets, technology innovations,
the remainder of 2021. regulations and catastrophic events.
Page 3 of 8Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Investors are encouraged to consider these and other factors
including their own investment objectives carefully before making
any investment decisions and are urged to avoid placing undue
reliance on forward-looking statements.
Additionally, investors should be aware that the Fund has no
specific intention to update any forward-looking statements
whether as a result of new information and future events, prior to
the release of the next Management Report on Fund Performance.
Related party transactions
Manager, Portfolio Manager and Transfer Agent
The Fund is managed by Integra. Integra provides or arranges
for the provision of all general management and administrative
services rendered by the Fund in its day-to-day operations,
including providing or arranging the provision of investment
advice and record-keeping services for the Fund.
As a result of providing investment advisory and management
services, the Fund’s Manager receives management fees from
the Fund’s unitholders, based on the net asset value of the Fund.
These management fees are paid either by a redemption of units
or the unitholder, if an institution, may be invoiced and payment
will be delivered to the Manager.
Page 4 of 8Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Financial highlights
The following tables show selected key financial information about the Fund and are intended to help you understand the Fund’s financial
performance for the six-month period ended June 30, 2021 and for the financial years ended December 31, as indicated. This information
is on a per unit basis and is derived from the Fund’s unaudited interim financial statements and audited annual financial statements.
Six months ended June 30th Years ended December 31st
2021 2020 2019 2018 2017 2016
Net Asset Value, beginning of period(1) $18.73 $18.74 $16.32 $18.84 $18.23 $16.00
Increase (decrease) from operations:
Total revenue 0.30 0.58 0.57 0.53 0.53 0.52
Total expenses (0.01) (0.02) (0.03) (0.03) (0.03) (0.06)
Realized gains (losses) 1.00 0.08 0.28 0.28 0.65 1.15
Unrealized gains (losses) 1.75 0.34 2.50 (2.56) 0.33 1.81
Total increase (decrease) from operations (2) $3.04 $0.98 $3.32 ($1.78) $1.48 $3.42
Distributions:
From income (excluding dividends) — — — — — —
From dividends (0.30) (0.55) (0.57) (0.50) (0.50) (0.49)
From capital gains (1.17) (0.04) (0.27) (0.24) (0.36) (0.57)
Return of capital — — — — — —
Total Annual Distributions (3)
($1.47) ($0.59) ($0.84) ($0.74) ($0.86) ($1.06)
Net Assets, end of period (1)
$20.29 $18.73 $18.74 $16.32 $18.84 $18.23
Ratios and Supplemental Data
(Based on Pricing NAV)
Net assets (000’s) $149,601 $139,805 $129,628 $114,417 $130,439 $123,092
Number of units outstanding 7,372,191 7,462,658 6,918,860 7,012,955 6,924,752 6,178,264
Expense ratio (%) 0.07% 0.08% 0.09% 0.08% 0.09% 0.17%
Expense ratio before waivers or absorptions (%) 0.07% 0.08% 0.09% 0.08% 0.09% 0.17%
Portfolio turnover rate (%) (4)
25.56% 49.28% 44.43% 54.98% 55.02% 104.55%
Trading expense ratio (%) (5)
0.05% 0.05% 0.05% 0.06% 0.08% 0.17%
Ratios and Supplemental Data
Supplementary information to the Financial Highlights calculations are based on the following:
(1) The information is derived from the Fund’s financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”).
(2) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding
over the period.
(3) Distributions were paid in cash/reinvested in additional units of the Fund, or both.
(4) The Fund’s portfolio turnover rate is a measure of trading activity in a Fund’s portfolio. A portfolio turnover rate of 100% is equivalent to the Fund buying and selling all of the securities in its portfolio once in
the course of the year. The higher a Fund’s portfolio turnover rate in a year, the greater the trading costs payable by the Fund in the year, and the greater the chance of an investor receiving taxable capital gains
in the year. There is not necessarily a relationship between a high portfolio turnover rate and the performance of a Fund.
(5) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of the Fund’s average net asset value during the period.
Management Fees
The Fund pays no management fees to Integra. For management services provided to them by Integra, clients of Integra will pay an
investment management fee directly to Integra, as set out in their agreement with Integra. The amount of the investment management
fee is negotiable between the client and Integra.
Page 5 of 8Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Past performance
The performance reported below assumes that all distributions Annualized Returns (%)
made by the Fund in the period shown were reinvested in
This table shows the fund’s historical annualized returns for the
additional units of the Fund. If an investor holds the Fund outside
periods shown ending June 30, 2021, compared to the returns of
of a registered plan, he/she will be taxed on these distributions.
its benchmark.
How the Fund has performed in the past does not necessarily 1 yr 3 yrs 5 yrs 10 yrs
indicate how it will perform in the future.
Integra Canadian Value
All rates of return are calculated based on Pricing NAV and are in 32.80 8.53 9.50 7.44
Growth Fund
Canadian dollars unless stated otherwise.
Benchmark 33.85 10.80 10.77 7.44
Fund Inception: March 12, 1999
Benchmark
Year-by-year returns (%)
The Integra Canadian Value Growth Fund Benchmark reflects the
The following bar chart shows the investment fund’s annual market sectors in which the Fund invests.
performance for each of the years shown, and illustrates how the
investment fund’s performance was changed from year to year. In 100% S&P/TSX Composite Index
percentage terms, the bar chart shows how much an investment
made on the first day of each financial year would have grown or The S&P/TSX Composite Index (Total Return) is a total return index that tracks the performance of
some of the largest and most widely held stocks listed on the Toronto Stock Exchange.
decreased by the last day of each financial year.
Annual Returns (%) ending June 30
40
32.8
30.97
30
20
11.61 10.31
10 8.35
3.47 1.86
1.27
0
-5.49
-10
-12.40
-20
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Page 6 of 8Semi-Annual Management Report of Fund Performance as at June 30, 2021
Integra Canadian Value Growth Fund
Summary of Investment Portfolio
as at June 30, 2021
Asset Mix Top 25 Holdings
% of Fund’s (excluding cash equivalents) % of Fund’s
Net Asset Value Net Asset Value
Canadian Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.54 1. Royal Bank of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.86
Other Assets, Net of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 0.46 2. Toronto-Dominion Bank (The) . . . . . . . . . . . . . . . . . . . . . . . 4.92
3. Canadian Natural Resources Ltd. . . . . . . . . . . . . . . . . . . . . 4.44
Sector Mix 4. Canadian National Railway Co. . . . . . . . . . . . . . . . . . . . . . . 4.17
5. Enbridge Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14
% of Fund’s
Net Asset Value 6. Shopify Inc., Class ‘A’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.84
Consumer Discretionary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.45 7. Canadian Pacific Railway Ltd. . . . . . . . . . . . . . . . . . . . . . . . . 3.65
Consumer Staples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.62 8. Manulife Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.30
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 9. Nutrien Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18
Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.70 10. Bank of Nova Scotia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12
Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.27 11. TC Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.78
Industrials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.52 12. Magna International Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.52
Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.51 13. Bank of Montreal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.40
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.75 14. National Bank of Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.56 15. Brookfield Asset Management Inc., Class ‘A’ . . . . . . . . . . . 2.09
Telecommunication Services . . . . . . . . . . . . . . . . . . . . . . . . . . 2.54 16. Sun Life Financial Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.35 17. Suncor Energy Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.79
Non Canadian Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.57 18. Pembina Pipeline Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.67
Other Assets, Net of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 0.46 19. CGI Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.61
20. Restaurant Brands International Inc. . . . . . . . . . . . . . . . . . . . 1.43
21. West Fraser Timber Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 1.40
22. iA Financial Corp. Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.38
23. Constellation Software Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 1.22
24. Intact Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21
25. Alimentation Couche-Tard Inc., Class ‘B’ . . . . . . . . . . . . . . . 1.05
Total Fund Net Asset Value: $149,601,352
The summary of investment portfolio may change due to
ongoing portfolio transactions of the investment fund. The most
recent annual report, semi-annual report or quarterly report is
available at no cost, by calling 1-800-363-2480, by writing to us
at Integra Capital Limited, 130 King Street West, Suite 1500,
P.O. Box 424, Toronto, Ontario, M5X 1E3 or by visiting our
website at www.integra.com
Page 7 of 8Integra Capital Limited 130 King Street West Suite 1500 P.O. Box 424 Toronto, Ontario M5X 1E3 Manager, Portfolio Manager, Transfer Agent and Registrar Integra Capital Limited, Toronto, Ontario Auditors KPMG LLP, Toronto, Ontario Legal Counsel Osler, Hoskin & Harcourt LLP ® Registered Canadian trademark
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