Nicola Core Portfolio Fund
- February Return: -0.2%
- Year-to-Date Return: +1.5%
The portfolio is managed with similar weights to the model portfolio and consists entirely of Nicola Pooled Funds and Limited Partnerships with an aim to combine current income with long-term capital growth. Client returns may vary based on individual asset mixes and specific circumstances.
Learn more and view the full returns of the Nicola Core Portfolio Fund.
Nicola Bond Fund
- February Return: +0.7%
- Year-to-Date Return: +1.6%
The Nicola Bond Fund underperformed the iShares Core Canadian Universe Bond Index ETF, which returned +1.1% in February. The underperformance was primarily driven by the fund's shorter duration positioning. However, strong credit selection and sector allocation helped mitigate the impact.
Looking ahead, the Nicola Bond Fund expects ongoing volatility in the investment-grade credit market driven by tariff and policy developments. The Nicola Bond Fund remains defensively positioned, ready to adjust exposure as market conditions evolve.
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Nicola High Yield Bond Fund
- February Return: +0.1% CAD / +0.5% USD
- Year-to-Date Return: +0.6% CAD / 0.0% USD
The Nicola High Yield Bond Fund underperformed the iShares U.S. High Yield Bond Index ETF (CAD-Hedged), which returned +0.6% in February. High-yield bonds delivered relatively strong returns in February as U.S. Treasury yields fell 0.2%–0.3% across the curve, driven by weakening economic data and rising policy and geopolitical uncertainty.
Given tight high-yield valuations, the Nicola High Yield Bond Fund remains defensively positioned, prioritizing higher-quality credits amid ongoing trade and U.S. fiscal policy uncertainties.
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Nicola Canadian Mortgage Fund
- February Return: +0.6%
- Year-to-Date Return: +1.2%
The Nicola Canadian Mortgage Fund delivered a positive return in February, with two new loans funded during the month. As of month-end, the fund held 9.7% in cash and cash equivalents, with 79.9% of the direct loan portfolio secured by senior ranking mortgages.
Learn more and view the full returns of the Nicola Canadian Mortgage Fund.
Nicola U.S. Mortgage Fund
- February Return: +0.5% CAD / +0.6% USD
- Year-to-Date Return: +1.4% CAD / +1.6% USD
The Nicola U.S. Mortgage Fund posted a positive return in February, with no new loans funded during the month. As of month-end, the fund held 33.2% in cash and cash equivalents, with 100% of the direct loan portfolio secured by senior ranking mortgages.
Learn more and view the full returns of the Nicola U.S. Mortgage Fund (USD).
Nicola Private Debt Fund
- February Return: +0.6% CAD / +0.8% USD
- Year-to-Date Return: +1.2% CAD / +1.4% USD
The Nicola Private Debt Fund posted a positive return in February, driven primarily by contractual cash interest income from its diversified portfolio of direct investments. The fund deployed US$40.1 million during the month and made three new direct investments, including a senior term loan to a managed IT services provider specializing in managed desktop, cybersecurity, and cloud management. Additionally, the fund had two realizations in February, totaling US$17.0 million.
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Nicola Canadian Equity Income Fund
- February Return: -1.6%
- Year-to-Date Return: +1.2%
After a strong January, the TSX faced increased volatility in February, returning -0.4% compared to +3.5% the previous month. The primary driver was the ongoing U.S. trade dispute, particularly with Canada, as shifting tariff policies under the Trump administration heightened economic and market uncertainty. On the economic front, February marked the first month without job gains since November 2024, with unemployment holding at 6.6%. Weaker employment data and growing tariff concerns have increased the likelihood of a Bank of Canada rate cut in March.
At month-end, Canadian equities comprised 93% of the fund’s assets.
Learn more and view the full returns of the Nicola Canadian Equity Income Fund.
Nicola U.S. Equity Income Fund
- February Return: -3.2% CAD / -2.8% USD
- Year-to-Date Return: +2.7% CAD / +2.1% USD
The Nicola U.S. Equity Income Fund underperformed the S&P 500 by 1.5% in February. The underperformance was driven by stock selection within Consumer Staples and sector allocation, with the Fund’s overweight positions in Consumer Discretionary and Communication Services (the worst and second-worst performing sectors for the month) proving detrimental.
At month-end, the fund's delta-adjusted equity exposure stood at 98%, with approximately 2% in uncollateralized cash.
Learn more and view the full returns of the Nicola U.S. Equity Income Fund (USD).
Nicola International Leaders Fund
- February Return: +1.6%
- Year-to-Date Return: +7.9%
The Nicola International Leaders Fund underperformed the MSCI ACWI ex-USA NTR Index (+1.7%) in February.
Main relative contributors to performance during the month were holdings in Health Care, Industrials and Spain. Main relative detractors to performance during the month were our holdings in Info Tech and Taiwan.
Learn more and view the full returns of the Nicola International Leaders Fund.
Nicola Global Small-Cap Equity Fund
- February Return: -1.4% CAD / -0.9%% USD
- Year-to-Date Return: +1.9% CAD / +1.3% USD
The Nicola Global Small-Cap Equity Fund outperformed the MSCI ACWI Small Cap NTR Index (-3.0%) in February.
Main relative contributors to performance during the month were holdings in Industrials, Hong Kong, and the United States. Main detractors were holdings in Energy and the United Kingdom.
Learn more and view the full returns of the Nicola Global Small-Cap Equity Fund.
Nicola Sustainable Innovation Fund
- February Return: -2.9% CAD / -2.4% USD
- Year-to-Date Return: -0.8% CAD / -1.4% USD
The Nicola Sustainable Innovation Fund delivered positive returns in February amidst a volatile market environment. President Trump’s tariff policy announcements and subsequent pauses with Canada, Mexico, and China caused significant market fluctuations. Additionally, the newly formed Department of Government Efficiency focused on cost-cutting measures, negatively impacting companies reliant on federal contracts.
In the AI/data center sector, growth expectations reset following the announcement of Chinese AI startup DeepSeek, which lowered costs and improved AI models. The renewables sector, especially battery and solar companies, continued to face challenges with policy uncertainty, as several companies lowered their guidance.
Top performers in the fund were Northland Power, Boralex, and Orsted, while Fluence Energy, Tetra Tech, and Sunrun were the largest negative contributors. We exited positions in Fluence Energy due to weaker competitive positioning and Ameresco, as potential federal budget cuts could affect its largest customer. A new position was initiated in Vertiv, a leader in critical digital infrastructure for data centers. We were also active in rebalancing the portfolio, adding to water company positions for stability. Additionally, we received a follow-on capital call for our Ares Climate Infrastructure Partners position in March.
Learn more and view the full returns of the Nicola Sustainable Innovation Fund (USD).
Nicola Global Infrastructure Limited Partnership
- February Return: +0.5% CAD / +0.7% USD
- Year-to-Date Return: +1.3% CAD / +1.3% USD
The Nicola Global Infrastructure Limited Partnership delivered positive returns in February. Returns were largely driven by the sale of a European renewable energy platform at a significant premium, as well as the positive impact of inflation linkages across our globally diversified fund investments. Current AUM stands at C$451M, with a 4% p.a. distribution rate paid monthly.
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Nicola Private Equity Limited Partnership
- February Return: +0.4% CAD
- Year-to-Date Return: +1.1%
The Nicola Private Equity Limited Partnership delivered a positive return in February. During the month, the fund successfully completed two co-investments: one in a healthcare platform focused on women's health services and another in an enterprise software platform that enhances compliance and security through digital asset management. Additionally, the Nicola Private Equity Limited Partnership committed to Webster Equity Partners Fund V following our prior investment in Webster Fund V.
Learn more and view the full returns of the Nicola Private Equity Limited Partnership.
Nicola Global Real Estate Fund
- February Return: +2.1%
- Year-to-Date Return: +3.2%
Global trade tensions are adding to the list of headwinds investors must consider. While uncertainty clouds the macroeconomic outlook, fundamentals remain solid, with expectations for cash flows to improve in 2025. Valuations for publicly traded REITs are approaching levels seen during the 2008-2009 Global Financial Crisis and the early COVID-19 period. Additionally, easing bond yields tend to support favourable real estate returns. During the month, the investment in the Invesco Real Estate Europe Fund was sold, and the proceeds are being redeployed into publicly traded securities, capitalizing on perceived discounts.
Learn more and view the full returns of the Nicola Global Real Estate Fund.
Nicola Canadian Real Estate Limited Partnership
Nicola Canadian Real Estate LP NAV per unit remains unchanged at $150.1278, effective trade date February 28, 2025. This represents a positive return for January of +0.3%.
Returns were positive this month, primarily due to increased appraised values of industrial assets in Ontario. Portfolio Leverage is 46.90%.
Learn more and view the full returns of the Nicola Canadian Real Estate Limited Partnership.
Nicola U.S. Real Estate Limited Partnership
Nicola US Real Estate LP NAV per unit has decreased to US$181.2674 (previously US$182.7645), effective trade date February 28, 2025. This represents a decrease of 0.8% and a negative return for January of 0.4%.
Returns were negative this month, primarily due to a decrease in appraised values for multi-family assets. Portfolio Leverage is 50.30%.
Learn more and view the full returns of the Nicola U.S. Real Estate Limited Partnership (USD).
Nicola Value Add Real Estate Limited Partnership
Nicola Value Add Real Estate LP (NVARELP) NAV per unit has decreased to $251.8415 (previously $252.0066), effective trade date February 28, 2025. This represents a negative return for January of 0.1%. In January, NVARELP funded $6.8M for existing projects.
Learn more and view the full returns of the Nicola Value Add Real Estate Limited Partnership.
Disclaimer
This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information presented here has been obtained from sources believed to be reliable, but not guaranteed. Returns are quoted net of fund/LP expenses but before Nicola Wealth portfolio management fees. Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Please speak to your Nicola Wealth advisor for advice based on your unique circumstances. Nicola Wealth Management Ltd. (Nicola Wealth) is registered as a Portfolio Manager, Exempt Market Dealer, and Investment Fund Manager with the required securities’ commissions. This is not a sales solicitation. This investment is generally intended for tax residents of Canada who are accredited investors. Please read the relevant documentation for additional details and important disclosure information, including terms of redemption and limited liquidity. Comparisons of the historical performance of Nicola Wealth funds or models to the historical performance of indexes, mutual funds or other investment vehicles should only be undertaken with consideration of the differences that exist between the underlying investments that comprise the compared investment vehicles. Indexes may be primarily composed of a single asset type/asset class (i.e. 100% equities or 100% bonds) whereas Nicola Wealth funds may or may not contain a combination of exchange-traded equities, marketable bonds, private investments, other alternative investment classes and exempt products. When making any comparison of historical performance, these differences and their impact on the performance of each comparable should be taken into account. ETF’s are pooled funds that track a specific investment universe that is expressed by a market index or a basket and that is listed on an exchange. Unlike a market index, an ETF incurs trading costs and other charges, including taxes. Because of these incurred costs, an ETF may underperform the market index that it tracks. ETF returns stated in this material are based on NAVs and are stated net of fees and other costs, including transaction costs. For a complete listing of Nicola Wealth Real Estate portfolios, please visit https://realestate.nicolawealth.com. All values sourced through Bloomberg. Effective October 31, 2023, Nicola Balanced Mortgage Fund changed its name to Nicola Canadian Mortgage Fund. Effective January 1, 2024, Nicola Infrastructure and Renewable Resources Limited Partnership changed its name to Nicola Global Infrastructure Limited Partnership.
