Nicola Core Portfolio Fund
- January Return: +1.7%
The portfolio is managed with similar weights to the model portfolio and consists entirely of Nicola Pooled Funds and Limited Partnerships. Client returns may vary based on individual asset mixes and specific circumstances.
Learn more about the Nicola Core Portfolio Fund.
Nicola Bond Fund
- January Return: +0.9%
The Nicola Bond Fund underperformed the iShares Core Canadian Universe Bond Index ETF, which returned +1.2% in January. 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, we expect ongoing volatility in the investment-grade credit market driven by tariff and policy risks. The Nicola Bond Fund remains defensively positioned, ready to adjust exposure as market conditions evolve.
Learn more about the Nicola Bond Fund.
Nicola High Yield Bond Fund
- January Return: +0.5% CAD / -0.5% USD
The Nicola High Yield Bond Fund underperformed the iShares U.S. High Yield Bond Index ETF (CAD-Hedged), which returned +1.3% for the month. High-yield bonds saw relatively strong returns as credit spreads narrowed by 0.3% and U.S. Treasury yields remained stable with the Fed keeping rates steady. Lower-quality credits, especially CCCs, outperformed, while higher-quality credits lagged.
The Nicola High Yield Bond Fund will continue to focus on higher-quality credits with solid balance sheets and credit fundamentals.
Learn more about the Nicola High Yield Bond Fund.
Nicola Canadian Mortgage Fund
- January Return: +0.6%
The Nicola Canadian Mortgage Fund delivered a positive return in January, with two new loans funded during the month. As of February 28, the fund held 10.1% in cash and cash equivalents, with 78.7% of the direct loan portfolio secured by senior ranking mortgages.
Learn more about the Nicola Canadian Mortgage Fund.
Nicola U.S. Mortgage Fund
- January Return: +0.9% CAD / +0.9% USD
The Nicola U.S. Mortgage Fund posted a positive return in January, with four new loans funded during the month. The fund held 9.8% in cash and cash equivalents at month-end, with 100% of the direct loan portfolio secured by senior ranking mortgages.
Learn more about the Nicola U.S. Mortgage Fund (USD).
Nicola Private Debt Fund
- January Return: +0.6% CAD / +0.6% USD
The Nicola Private Debt Fund posted a positive return in January. Returns for the month were primarily driven by contractual cash interest income from the fund's diversified portfolio of direct investments. The fund deployed US$34.4 million in January, making one new direct investment—a senior term loan to a US-based provider of specialty outsourced clinical engineering parts and services to customers in the healthcare sector. The fund had no realizations in January.
Learn more about the Nicola Private Debt Fund.
Nicola Canadian Equity Income Fund
- January Return: +2.8%
The Nicola Canadian Equity Income Fund underperformed the S&P/TSX Composite Index by approximately 0.7% in January. This was primarily due to negative allocation effects that more than offset strong security selection. The fund's underweight to the Materials sector, particularly gold and precious metals mining companies, was the largest performance detractor, as these assets rallied in the risk-on environment.
At month-end, Canadian equities comprised 91.1% of the fund's assets.
Learn more about the Nicola Canadian Equity Income Fund.
Nicola U.S. Equity Income Fund
- January Return: +6.2% CAD / +5.1% USD
The Nicola U.S. Equity Income Fund outperformed the S&P 500 by 2.3% USD in January. The outperformance was attributable to stock selection within Information Technology and sector allocation, with the fund's overweight position in Communication Services and underweight in Information Technology proving beneficial.
At month-end, the fund's delta-adjusted equity exposure stood at 99%, with approximately 1% in uncollateralized cash.
Learn more about the Nicola U.S. Equity Income Fund (USD).
Nicola International Leaders Fund
- January Return: +6.3%
The Nicola International Leaders Fund outperformed the MSCI ACWI ex-USA NTR Index (+4.1%) in January.
Main contributors to performance were holdings in Health Care and Germany, with Sanofi being one of the biggest contributors as the company's 2025 guidance confirmed a rebound in earnings. Main detractors were holdings in Materials and South Korea, with Glencore impacted by failed merger discussions with Rio Tinto and concerns over potential U.S. tariffs on global growth.
Learn more about the Nicola International Leaders Fund.
Nicola Global Small-Cap Equity Fund
- January Return: +3.3% CAD / +2.2% USD
The Nicola Global Small Cap Fund outperformed the MSCI ACWI Small Cap NTR Index (+2.7%) in January. Main contributors to performance were holdings in Materials and Germany, with Verallia (European glass container manufacturer) rising on reports of a potential takeover offer from its largest shareholder. Main detractors were holdings in Financials, Health Care, and the United States, with Perrigo declining on broker downgrades due to concerns over potential pricing pressure on certain products.
Learn more about the Nicola Global Small-Cap Equity Fund.
Nicola Sustainable Innovation Fund
- January Return: +2.1% CAD / +1.1% USD
The Nicola Sustainable Innovation Fund delivered positive returns in January amid an eventful start to the year with the new Trump administration. The administration declared a National Energy Emergency focusing on domestic energy infrastructure and production, streamlining permitting, reducing regulation, and reversing climate-focused initiatives from the previous administration.
We saw significant announcements supporting AI infrastructure investment, including OpenAI's Stargate Project proposing a $500B investment over four years in the US. Late in the month, Chinese AI startup DeepSeek caused market ripples by announcing lower costs and more efficient AI models, which impacted companies associated with AI investments. Top performers for the month were Nextracker, Constellation Energy, and Prysmian, while Fluence Energy, Orsted, and Boralex were the largest negative contributors. We exited our position in EDPR and deployed cash opportunistically following the DeepSeek-related selloff.
Learn more about the Nicola Sustainable Innovation Fund (USD).
Nicola Global Infrastructure Limited Partnership
- January Return: +0.8% CAD / +0.6% USD
The Nicola Global Infrastructure Limited Partnership delivered positive returns in January. In local currency, assets returned +0.9% during the month, and +8.7% over the trailing twelve months. Returns were driven by strong performance at two globally diversified fund investments and a markup to NAV on a diversified secondaries portfolio of value-add investments acquired at a discount. During the month, the Fund invested in a network of Japanese telecommunication towers providing mobile network coverage for 8 million customers. Current AUM stands at C$437M, with a 4% p.a. distribution rate paid monthly.
Learn more about the Nicola Global Infrastructure Limited Partnership.
Nicola Private Equity Limited Partnership
- January Return: +0.7% CAD
The Nicola Private Equity Limited Partnership delivered a positive return in January. During the month, the LP successfully exited its 2018 investment in KT Health, a leading manufacturer and distributor of kinesiology tape and recovery products, delivering a 2.65x return over its holding period.
Learn more about the Nicola Private Equity Limited Partnership.
Nicola Global Real Estate Fund
- January Return: +1.0%
The Nicola Global Real Estate Fund outperformed the iShares S&P/TSX Capped REIT Index (-1.2%) in January. Economic challenges are mounting, driven by a deceleration in anticipated U.S. interest rate cuts, uncertainty from the upcoming Canadian federal election, and recent U.S. tariff discussions. Despite investor caution, REIT trading valuations have approached levels close to the 2008-2009 Great Financial Crisis and early COVID periods. Fundamentals remain strong, with healthy cash flow growth and attractive valuations. The fund's outperformance was primarily due to its global focus, as U.S. and International REITs outperformed domestic REITs.
Learn more about the Nicola Global Real Estate Fund.
Nicola Canadian Real Estate Limited Partnership
Nicola Canadian Real Estate LP NAV per unit has decreased to $150.1278 (previously $150.5661), effective trade date January 31, 2025. This represents a decrease of 0.3% and a return for December of 0.0%.
Returns were positively impacted this month by increased appraised values of industrial assets in Ontario and Alberta. Actual YTD return as at January 31, 2025 is 2.26%. Portfolio Leverage is 47.63%.
Learn more about the Nicola Canadian Real Estate Limited Partnership.
Nicola U.S. Real Estate Limited Partnership
Nicola U.S. Real Estate LP NAV per unit has decreased to US$182.7645 (previously US$183.1482), effective trade date January 31, 2025. This represents a decrease of 0.2% and a positive return for December of 0.2%.
Returns were positive this month, primarily due to an increase in appraised values for office assets in Seattle and Texas. Actual YTD return as at January 31, 2025 is -0.8%. Portfolio Leverage is 49.89%.
Learn more about the Nicola U.S. Real Estate Limited Partnership (USD).
Nicola Value Add Real Estate Limited Partnership
Nicola Value Add Real Estate LP NAV per unit has increased to $252.0066 (previously $251.0336), effective trade date January 31, 2025. This represents an increase of 0.4% and a positive return for December of 0.4%. In December, NVARELP funded $7.9M for existing projects.
Learn more about 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.
