Nicola Core Portfolio Fund
- October Return: +1.3%
- Year-to-Date Return: +8.0%
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
- October Return: +0.1%
- Year-to-Date Return: +6.8%
The Nicola Bond Fund posted a positive return in October, outperforming the iShares Core Canadian Universe Bond Index ETF, which faced headwinds from rising Canadian government bond yields, mirroring the upward movement in U.S. Treasury yields. In response to economic conditions under sustained high interest rates, the Bank of Canada reduced its key interest rate to 3.75%.
Canadian bond issuance reached a record $15.2 billion in October, driven by tightening credit spreads amid continued interest rate volatility. Higher-beta sectors such as REITs, bank-subordinated debt, and autos outperformed, while lower-beta sectors, including Utilities and Infrastructure, underperformed.
Learn more about the Nicola Bond Fund.
Nicola High Yield Bond Fund
- October Return: +1.4% CAD / -1.5% USD
- Year-to-Date Return: +8.7% CAD / +3.3% USD
- The Nicola High Yield Bond Fund outperformed the iShares US High Yield Bond Index ETF (CAD-Hedged) in October, benefiting from its shorter duration, stronger credit selection, and U.S. dollar exposure. Despite challenges posed by rising U.S. Treasury yields, the Nicola High Yield Bond Fund’s focus on U.S. high-yield credits contributed to its positive performance.
New high-yield issuances, including Specialty Building Products bonds, boosted returns. Canadian corporate hybrid positions in the midstream/pipeline sector and Canadian banks' capital notes also contributed positively. The Nicola High Yield Bond Fund will continue focusing on higher-quality credits with favourable risk/reward characteristics.
Learn more about the Nicola High Yield Bond Fund.
Nicola Canadian Mortgage Fund
- October Return: +0.7%
- Year-to-Date Return: +6.7%
The Nicola Canadian Mortgage Fund delivered a positive return in October, with strong year-over-year performance. Although no new loans were funded during the month, origination activity picked up, with several loans scheduled for funding in the coming months.
As of October 31, the fund held 16.7% in cash and cash equivalents, reflecting a conservative position. The direct loan portfolio remained predominantly secure, with 74.9% of loans backed by senior-ranking mortgages.
Learn more about the Nicola Canadian Mortgage Fund.
Nicola U.S. Mortgage Fund
- October Return: +1.2% CAD / +1.0% USD
- Year-to-Date Return: +4.1% CAD / +4.1% USD
The Nicola U.S. Mortgage Fund posted a positive October return. .Two new loans were funded during the month.
As of month-end, the fund held 11.1% in cash and cash equivalents. The entire direct loan portfolio was secured by senior-ranking mortgages.
Learn more about the Nicola U.S. Mortgage Fund (USD).
Nicola Private Debt Fund
- October Return: +0.8% CAD / +0.6% USD
- Year-to-Date Return: +7.3% CAD / +7.1% USD
The Nicola Private Debt Fund posted a positive return in October, driven by contractual cash interest income from its diversified portfolio.
During the month, the fund deployed US$12.7 million, including a new senior term loan to a retail insurance brokerage firm. It also realized a direct investment totalling US$14.1 million.
Learn more about the Nicola Private Debt Fund.
Nicola Canadian Equity Income Fund
- October Return: -1.2%
- Year-to-Date Return: +16.8%
The Nicola Canadian Equity Income Fund underperformed relative to S&P/TSX Composite Index in October, primarily due to negative stock selection in the Consumer Discretionary and Real Estate sectors. Overweight positions in Real Estate and underweight positions in Materials, particularly precious metals, contributed to the underperformance.
Top contributors to performance included TC Energy, Brookfield Asset Management, and Canadian Western Bank. Detractors included TD Bank, Canadian Apartment REIT, and Canadian Tire. The fund actively added to positions in Alimentation Couche-Tard, TD Bank, Information Services Corp., Andlauer Healthcare, and Canadian National Railway, while trimming positions in Aritzia and Royal Bank.
Learn more about the Nicola Canadian Equity Income Fund.
Nicola U.S. Equity Income Fund
- October Return: +2.2% CAD / -0.7% USD
- Year-to-Date Return: +17.9% CAD / +12.0% USD
The Nicola U.S. Equity Income Fund outperformed the S&P500 in October, with positive stock selection in the Consumer Staples sector. Holdings such as Casey’s and Lamb Weston contributed to the outperformance. However, underweight exposure to the top-performing Financials sector partially offset these gains.
Top contributors included Wesco, Lamb Weston, and Visa, while detractors were Adobe, Prologis, and Cubesmart. As of October 31, the fund had 94% delta-adjusted equity exposure, reflecting its options positioning and minimal uncollateralized cash.
Learn more about the Nicola U.S. Equity Income Fund (USD).
Nicola International Leaders Fund
- October Return: -1.0%
- Year-to-Date Return: +17.5%
The Nicola International Leaders Fund outperformed the MSCI ACWI ex-USA NTR Index by +1.0% in October. Key contributors included Taiwan Semiconductor Manufacturing Company (TSMC) and Japanese banks such as MUFG and SMFG, which performed well following hawkish comments from the Bank of Japan.
Detractors included holdings in the Health Care sector and France, particularly Sanofi, which faced negative impacts from disappointing news regarding a consumer division stake sale.
Learn more about the Nicola International Leaders Fund.
Nicola Global Small-Cap Equity Fund
- October Return: -2.0% CAD / -4.7% USD
- Year-to-Date Return: +9.7% CAD / +4.3% USD
The Nicola Global Small-Cap Equity Fund underperformed the MSCI ACWI Small Cap NTR Index by -2.1% in October. Strong earnings from Yue Yuen contributed positively, while Carter’s underperformed due to weak quarterly results amid inflationary pressures.
The Nicola Global Small-Cap Equity Fund’s exposure to Energy and Hong Kong positively influenced performance, while Industrials and U.S.-based holdings detracted.
Learn more about the Nicola Global Small-Cap Equity Fund.
Nicola Sustainable Innovation Fund
- October Return: -2.8% CAD / -5.6% USD
- Year-to-Date Return: +5.5% CAD / 0.2% USD
The clean energy sector faced headwinds from mixed third-quarter earnings and uncertainty around the 2024 U.S. presidential election, particularly regarding the future of the Inflation Reduction Act. Cameco, Nextracker, and Itron were top performers, while Enphase Energy, EDP Renewables, and First Solar detracted. The Nicola Sustainable Innovation Fund also completed a full redemption of the PIMCO California Carbon Access Fund, reallocating to more promising opportunities.
Learn more about the Nicola Sustainable Innovation Fund (USD).
Nicola Global Infrastructure Limited Partnership
- October Return: +0.6% CAD / -0.1% USD
- Year-to-Date: +5.9% CAD / +4.7% USD
The Nicola Global Infrastructure Limited Partnership’s positive performance was driven by investments in a global value-add infrastructure fund and a North American energy-as-a-service platform. The Nicola Global Infrastructure Limited Partnership made a strategic investment in electrification solutions for commercial fleets, capitalizing on growth in e-commerce and corporate decarbonization. The Nicola Global Infrastructure Limited Partnership now has C$399M in AUM with a 4% per annum distribution rate.
Learn more about the Nicola Global Infrastructure Limited Partnership.
Nicola Private Equity Limited Partnership
- October Return: +1.9%
- Year-to-Date: +7.8%.
Returns were driven by a valuation increase in Regimen Equity Partners Fund, a diversified private equity fund based in Vancouver. In October, the Nicola Private Equity Limited Partnership made a US$20M co-investment in a U.S.-based waste management firm, further diversifying its portfolio.
Learn more about the Nicola Private Equity Limited Partnership.
Nicola Global Real Estate Fund
- October Return: +0.1%
- Year-to-date: +7.1%
The Nicola Global Real Estate Fund outperformed the iShares S&P/TSX Capped REIT Index (XRE)by +8.7% in October, returning +0.1%. The performance was helped by currency fluctuations, as the Canadian Dollar weakened. The correction in REITs was driven by rising interest rates, with yields on 10-year Canadian and U.S. Bonds increasing. The fund remains optimistic about the sector, particularly with rate cuts expected in 2025 and attractive discounts to NAVs. The fund continues to shift its asset mix toward publicly traded REITs, which are trading below long-term averages.
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 $151.0489 (previously $151.3711), effective trade date October 31, 2024. This represents a decrease of 0.2% and a positive return for September of 0.1%.
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$183.6846 (previously US$184.3057), effective trade date October 31, 2024. This represents a decrease of 0.3% and a return for September of 0.0%.
Returns were flat this month, primarily due to an increase in appraised values for US multifamily assets offset by a decrease in values to office assets in Seattle and Texas. YTD return as at September 30, 2024 is -1.4%. Portfolio Leverage is 49.64%.
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 decreased to $249.7183 (previously $249.9417), effective trade date October 31, 2024. This represents a decrease of 0.1% and a negative return for September of 0.1%. In September, we funded $3.8M 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.
