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Episode 10: Value versus Momentum Investment Strategies with Equium Capital by CapIntel

Gord brings 22 years of investment industry experience to his role as founder and Managing Partner of Celernus. Prior to founding Celernus Investment Partners, Gord spent over ten years with DundeeWealth in roles that included, Branch Manager, Regional Manager, Investment Advisor, Portfolio Manager and ultimately Chief Operating Officer of the Retail Division. He holds an Honours B.A in economics from the University of Waterloo and a MBA from The Simon School at the University of Rochester in the State of New York. As an Investment Advisor and Portfolio Manager with Dundee he advised and managed approximately one hundred million dollars of client assets. 1:50 Opening 1:55 What is a mortgage-backed security? 3:51 What is a mortgage-based Mutual Fund? 7:58 How are these funds structured? How do you buy a mortgage? Why would a creditor sell a mortgage? 10:05 Why would a someone invest in a mortgage? 11:43 Can you walk through some of the benefits and drawbacks of investing in a mortgage-based mutual fund? 15:40 At Celernus, you manage a number of funds. Specifically, I wanted to ask you about the Celernus Mortgage and Income Trust Fund. Why did you choose to manage this fund? In other words, why invest in mortgages, and other debt? 23:16 Can you walk our listeners through how you evaluate a mortgage for investment? Does it differ based on the underlying asset (commercial vs. residential, etc.)? 26:10 Why do you have a positive outlook on this approach? Why continue to invest with it as a focus? 28:27 Based on my understanding, real estate prices, and interest rates would affect the performance of your fund. In that context: What do you think some of the primary opportunities and threats are to real estate prices and interest rates in Canada in the near term? 32:42 Describe the ideal investor for a debt-based fund in your mind. 33:55 What are some of the challenges facing retail equity investors in the current markets?

Jason Ayres is a Derivative Market Specialist by designation, Director of Business Development and an Investment Review Committee member. Jason also sits on the R.N. Croft Financial Group Inc. Board of Directors. In his roll as Director of Business Development, Jason is responsible for the overall management of all strategic and operational marketing and partner/client relationship activities. As a member of the Investment Review Committee, Jason contributes as a market technician and derivative strategist. In addition, Jason has been one of the lead instructors for the TMX Montreal Exchange for the last 9 years, Jason continues to travel across Canada actively advocating the use of options as an important tool in effective portfolio management. Jason is also president of one of the largest and longest running trading and investing educational services in Canada and founder of a successful online resource for pro-active stock and option traders. 2:04 Opening 2:05 At Croft, you actively use derivatives as part of your portfolio management strategies. Why do you believe this is a methodology that will provide superior returns? In other words, why do you use derivatives? 11:04 What factors (market timing, sentiment, etc.) tend to drive Croft’s use of derivatives in client portfolios? 12:45 Describe one (or a few) ideal situation(s) to incorporate derivatives into your portfolio in your mind. 16:41 What are some of the challenges facing retail equity investors in the current markets?

Jason Ayres is a Derivative Market Specialist by designation, Director of Business Development and an Investment Review Committee member. Jason also sits on the R.N. Croft Financial Group Inc. Board of Directors. In his roll as Director of Business Development, Jason is responsible for the overall management of all strategic and operational marketing and partner/client relationship activities. As a member of the Investment Review Committee, Jason contributes as a market technician and derivative strategist. In addition, Jason has been one of the lead instructors for the TMX Montreal Exchange for the last 9 years, Jason continues to travel across Canada actively advocating the use of options as an important tool in effective portfolio management. Jason is also president of one of the largest and longest running trading and investing educational services in Canada and founder of a successful online resource for pro-active stock and option traders. 2:07 Opening 2:10 Most people think of Derivatives from high school math. What are derivatives in the context of finance? 3:21 Based on my understanding of derivatives, there are four primary types: options, swaps, futures and forward contracts. Can you walk us through an example of each? 14:34 How is the price of a derivative determined? 21:32 To drive the point home, why do derivatives exist? Why would someone want to create one? 25:34 Derivatives have a bit of a bad wrap in the public eye. For example, depending on the context you believe, some people think Warren Buffet described them as “financial weapons of mass destruction”, or that they took part in causing the Financial Crisis. Can you walk through some of the benefits and drawbacks of derivatives in general?

Chris graduated from Saint Mary’s University with a Bachelor of Commerce Degree, double majoring in finance and entrepreneurship. He began his career with Scotia Asset Management in 2008 and had progressing roles before becoming a senior analyst in the Investment Consulting Group. Chris was awarded the Chartered Financial Analyst (CFA) designation in 2012 and is now an equity Portfolio Manager with Richardson GMP. In addition, Chris is now teaching finance at the Lazaridis school of business and economics at Wilfred Laurier. 0:00 Opening 1:47 What is the study of behavioral economics? How does it differ from traditional economic thinking? 4:28 Understanding now that humans aren’t technically “rational” in the traditional vacuum-economic sense, what are some of the aspects that make us “irrational”? a. More specifically, what are some of the most important biases that impact investor behavior in the marketplace? 13:15 Presumably not everyone has every bias, or, more delicately put, not every person has the same bias to the same extent. Do people generally have the same biases? Or would something like risk tolerance, which seems to be the differentiator for investors, have a role to play in the biases I have? 16:16 At Richardson GMP, you co-manage the Redwood Behavioral Opportunities Fund, which incorporates these behavioral economics aspects into the trading strategy. Why do you believe this is a winning strategy? 20:16 How do you identify when behavioral bias is affecting a stock’s value, and that there is an opportunity capitalize on it? 34:10 What is one piece of advice you would like to leave our listeners with for investing on their own? 35:55 Closing

Prior to founding Evolve ETFs, Mr. Lala served as Head of WisdomTree Canada – a division of WisdomTree Investments Inc., one of the world’s largest ETF issuers. Prior to this, Mr. Lala was Executive Vice President and Head of Retail Markets for Fiera Capital Corporation, a prominent Canadian investment management firm with over $100 billion in assets under management. Mr. Lala co-founded and served as President and CEO of Propel Capital Corporation (which was acquired by Fiera Capital Corporation in September 2014). Propel raised approximately $1 Billion in structured products in its five years of operation. Prior to Propel, Mr. Lala worked with Jovian Capital. Mr. Lala held several roles at Jovian including President of JovFunds Inc., an asset management division of Jovian Capital. Mr. Lala holds a Bachelor’s degree in Economics from the University of Toronto (1994). 02:04 Opening 02:05 Why did you want to get in to the ETF? 04:31 How do you define gender diversity? 06:12 How many companies fit this definition? 06:57 What is the trend in gender diversity? Are more companies achieving it, or is it remaining stagnant? What factors are behind this trend? 09:16 At Evolve, you’ve created a number of specialized ETFs. Specifically, I’m interested to ask you about the Evolve North American Gender Diversity ETF. How did you create this fund? How is it structured? 12:02 As a male who started a Gender diversity ETF, why did you choose to do it and have you received any push back? 12:56 Are there other gender diversity products on the market? 14:32 To play the Devil’s advocate, I’ve read some of the criticisms of gender diversity. One of the main issues critics raise is that firms can become preoccupied chasing gender diversity, and can miss potential hazards or opportunities. In your research, have you found any validity to this “onboarding” time? If not, what are the main criticisms of companies’ focus on attaining gender diversity? 15:42 In the long run, if all companies embrace gender-diversity, like any innovation, the first-mover advantage could dissipate, reducing its benefits. Within this context: Do you believe that the advantage of gender-diversity will be limited once it is more widely achieved? 18:55 Describe the ideal investor for a gender diversity fund in your mind. 20:11 What are some of the challenges facing retail equity investors in the current markets?

Craig Jerusalim, is a Portfolio Manager at CIBC Asset Management and is responsible for the Canadian Equities core fund. Mr. Jerusalim began his career with CIBC in 2006 as part of the Canadian equity team. Previously, he served as an Analyst at Dynamic Mutual Funds in 2005 and a Software Developer at Amdocs Ltd. from 2001 to 2004. Mr. Jerusalim is a C.F.A charter holder and holds a Master of Business Administration from the University of Toronto and a Bachelor of Science from McGill University. 1:31 Opening 1:32 What is a country-focused Mutual Fund? 3:25 Aside from sovereignty, would the added benefit of having a country-focused Mutual Fund for an investor be an inherent knowledge of that country’s, government and economics? 4:40 Can you walk through some of the benefits and drawbacks of investing in a country-specific mutual fund? 7:54 At CIBC, you manage the CIBC Canadian Equity Fund and co-manage the CIBC Canadian Small-Cap fund. Why did you choose to manage these funds? In other words, why pick Canada? 10:32 What is your outlook on Canada? Why continue to invest with it as a focus? 11:36 What do you think some of the primary opportunities and threats are to Canadian equities in the near term? 15:54 What are some of the long-term threats to Canadian equities? 17:51 Both funds you manage have prospectuses that classify their risk. For the Canadian Equity Fund, it is listed as Medium. The Canadian Small Cap Fund is listed as Medium to High. How does your risk rating affect the day-to-day operation of each fund? a. How does it affect your trading strategy? b. Does it limit the industries you can invest in? 19:03 Can you describe the ideal investor for a Country-Focused Mutual fund? 23:23 Did you manage money through the Financial Crisis? What are some of the lessons you learned going through that? 26:01 What are some of the challenges facing retail equity investors in the current markets? 27:43 Is it a realistic expectation for an average or medium risk investor to try to match or beat the market? 29:17 Can you give our listeners once piece of advice about investing in equities? 25:43 Closing

Chris graduated from Saint Mary’s University with a Bachelor of Commerce Degree, double majoring in finance and entrepreneurship. He began his career with Scotia Asset Management in 2008 and had progressing roles before becoming a senior analyst in the Investment Consulting Group. Chris was awarded the Chartered Financial Analyst (CFA) designation in 2012. Chris’s specialization is in stock specific fundamental analysis. Analysing companies from the bottom up deriving fair value estimates and determining their relative attractiveness as either a stand-alone investment or in a portfolio context. He is also a contributing member in the asset allocation and sector selection process. 1:19 Opening 1:20 What makes a fund tactical? 3:07 Do you buy individual stocks and bonds when you are entering and exiting the equity market? 3:38 When dealing with ETFs, is there any risk you could potentially get locked in a downturn? 5:23 How does the model decide when you are in a bear or bull market? 6:26 Why did your firm create the Redwood Tactical Asset Allocation fund? 7:17 Can you elaborate on how the Redwood Tactical Asset Allocation Fund would compliment someone’s portfolio? 10:32 In a tactical fund you are chasing the market, can you beat the market using this method? 11:56 What are the advantages of the tactical fund vs it’s competitors? 14:50 What are some of the primary threats and opportunities to North American equities in the near term? 18:08 What are the long-term threats and opportunities? 19:22 How does your tactical fund stand up to market corrections? 20:58 How do tactical funds differ from robo-advisors? 21:55 What are some of the challenges facing retail equity investors in todays markets? 23:09 Can you give our listeners one piece of advice about investing in ETFs or equities? 25:43 Closing

Keith Dicker, founded IceCap Asset Management in 2010 and is the President and Chief Investment Officer. He has over 20 years of investment experience as a portfolio manager focusing on managing wealth for clients all over the World. He started his career in Halifax as a portfolio manager with a large Canadian bank where he managed high net worth portfolios on a discretionary basis. He then managed portfolios for an offshore bank in Bermuda for 10 years, as a senior portfolio manager and head of global equities. There Keith was responsible for global investment strategies including asset allocation, equities, fixed income, commodities, alternative investments and multi-currency. 1:36 Opening 1:37 What is an Exchange Traded Fund? 3:17 What are managed ETFs? 5:13 What are the advantages and drawbacks with managed ETFs? 8:51 Can we keep interest rates where they are to avoid a market crash? 12:11 What is the goal when you’re managing ETFs? 14:07 What is a Global Macro Manager? 16:20 Why do you chose to take the global macro approach and what are the advantages? 20:31 Will a 7% or 8% increase in interest rates result in a 7x or 8x decrease in the bond markets? 23:03 Should the bond market crash how should people react? 25:51 How do you see the market crash resolving itself? 30:50 Did you manage money through the financial crisis? What were some of the lessons you learned? 33:15 How do retail investors avoid the bond crisis? 36:22 Closing

Maria is a portfolio manager with 17 years of experience in the financial services industry. She began her career at Excel Funds Management as operations manager, and subsequently worked in Product Development at Fidelity Investments. Maria has been part of the Sprott precious metals team since 2005 and has been a portfolio manager on the Sprott Silver Equities Class since its inception in 2014. 0 - Opening 1:36 - What are precious metals? 2:01 - What is a precious metals equities mutual fund? 2:19 - How are they structured? 3:57 - When investing in a precious metals equity mutual fund, are you investing in the performance of the underlying commodity, the management teams of the mining companies or is it the mineral deposits you are buying in to? 6:23 - Why would someone invest in a company that is focused on precious metals? 8:47 - At Sprott you manage a number of precious metals funds, why did you choose to manage this fund, in other words why silver? 11:53 - What factors tend to drive the price of silver? 12:45 - Why do you have a positive outlook on silver, why continue to invest with it as a focus? 14:36 - Outside of immediate tax cuts and outside of the speculation what do you feel will be really positive for silver and gold in the long run? 15:35 - With regards to the declining number of discoveries, is it discoveries that are not as accessible or overall there are less silver deposits globally? 17:56 - Can you describe the ideal investor for a precious metals fund? 19:12 - Would it be a fair statement to say, gold can do well when equity markets are doing well, and it can also do well when equity markets are doing bad because people are looking for new havens for their money and will put their money in to gold and silver? 21:04 - Did you manage money through the financial crisis and what are some of the lessons you learned? 23:22 - Closing Sprott Asset Management LP is a registered investment manager. The information contained in the broadcast does not constitute an offer or solicitation to anyone in any jurisdiction. Prospective investors should contact their financial advisor to determine suitable investments for their investment portfolio. Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice. This broadcast contains the current opinions of the manager but not necessarily those of Sprott Asset Management LP and such opinions are subject to change without notice. This broadcast has been produced for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.

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