What is the Investment Objective of the Goodwood Fund?
The investment objective of the Fund is to maximize total return through the purchase and sale of primarily Canadian exchange-listed or over-the-counter quoted securities.
In selecting long and short positions, Goodwood will utilize a "bottom-up" approach featuring intensive analysis of the individual company and associated industry conditions. Goodwood does not attempt to predict the general direction of the overall market, preferring to focus on specific companies and industry specific issues.
It is expected that the Fund will maintain no more than 35 holdings at a given time although this number may fluctuate. This represents a relatively more concentrated approach to portfolio management to which Goodwood believes will enhance the total return over the longer term.
What is the difference between the Goodwood Fund and the Goodwood Capital Fund?
The Goodwood Fund is a Canadian long/short fund that commenced in October 1996. It is a mutual fund trust that is sold by an offering memorandum.
The Goodwood Capital Fund is a long only prospectus sold mutual fund. The Fund began in December 1999.
It is important to note that the long positions of the Goodwood Fund and the Goodwood Capital Fund are for the most part similar in name and portfolio weighting. The main difference is the Goodwood Fund's ability to make short sales.
Can I purchase units in the Funds directly from Goodwood Inc?
Yes. In fact we prefer unitholders to purchase the Funds directly with Goodwood as it allows the firm to have a stronger and ongoing communication dialog with the investor. Documentation can be downloaded directly from the New Accounts section on this website or alternatively, please call Catherine Olthuis directly at 416-203-2022 or toll-free 1-866-681-4393.
Additionally, investors may purchase units through their registered investment advisor.
Would the Goodwood Fund be RRSP and RRIF eligible?
Yes, the Goodwood Fund and the Capital Fund are considered Canadian content for registered accounts.
How often is the Goodwood Fund valued?
The Goodwood Funds are valued every Friday and month-end. The weekly and monthly results are published in the majority of Canadian newspapers (business section). As well, the month-end results are updated on our web site.
How often are unitholders communicated to?
We are strong advocates of being good communicators to the unitholders. Immediately following month-end, Goodwood forwards e-mail to all unitholders reporting the past month's results and in additional we provide a commentary on specific positions within the portfolio. If you would like to receive this monthly update, please provide Goodwood with your current email address.
Goodwood issues clients a quarterly statement and as well, we produce an Annual Report. In fact, all past nine editions of the Annual Report can be found on the web site.
Finally, every April, Goodwood is pleased to host an Annual Meeting and invite all the unitholders to attend. We use this forum to review the results for the prior year and leave plenty of time for a question and answer session. Past years have been well attended and have proven to be an enjoyable affair for everyone.
What safeguards do unitholders have?
Goodwood Inc. does not act as the Funds' custodian. The securities and cash owned by the Funds are held with National Bank. The Fund is valued weekly and on month-end by Unisen Inc., an independent fund accounting firm. Since inception (October, 1996), the Fund has been audited annually by KPMG.
What is Goodwood's expectation for rate of return?
To avoid any potential misunderstandings, we want to stress to you that we have no idea what the Fund's rate of return in any one-year period may be. Stock investing does not lend itself to accurate predictions of return. What should be expected is to earn a return over the long run that is above the risk free rate of return (the risk free rate of return is commonly defined as the return of treasury bills issued by the Federal Government) thus justifying the extra risk incurred.
Our hope is to average a 20% plus per annum, not every year - just average, which, if it is achieved, will be a mix of good years and bad years. And, to be clear, we are shooting for a "good year" every year.
Why does the Fund prefer long positions to short positions?
The following three reasons are key:
- A good long idea sometimes holds the potential for a double (100% return), triple (200%) or more of invested capital, while the most one can profit from a successful short idea is 100% (i.e., the security in question drops to $0.00).
Equity markets, with some notable exceptions, have tended to rise most of the time (i.e., let's go with the best odds).
- Other investors are likely to recognize a good long idea faster than to act on a good short idea because management is often touting the positives (and usually not saying much about the negatives). Also, there is far more investment capital geared to buying stocks than shorting stocks.
Why doesn't the Fund employ derivatives and utilize more leverage?
We are prohibited from using derivatives and we have self-imposed (and mandated by the Offering Memorandum) restrictions on our use of leverage. While very bright people can and do make effective use of large amounts of leverage and complicated derivative strategies, it is interesting to observe that the hedge funds that "self-implode" tend to be voracious consumers of these tools.
Furthermore, we have no past expertise in derivatives or in strategies that involve borrowing large amounts. Finally, our relatively large position concentration at the top end of the Fund gives us plenty of "zing" (obviating the need for leverage) in our results.
How would I redeem my units?
Please call Catherine Olthuis directly (416-203-2022, toll-free 1-866-681-4393) and she will assist you in processing your redemption request. Please note that we require written confirmation of your desire to redeem. The Goodwood Fund is subject to a 1% redemption fee if redeemed within the first 3 years of ownership, thereafter there is no charge. |
