A Member of the Jovian Capital Group of Companies
26 Wellington St. E. Toronto, ON P: 1.877.273.2156 info@jovfunds.com
Suite 920 M5E 1S2 F: 1.877.273.2157 www.jovfunds.com
Jov Leon Frazer Enhanced Opportunities Fund
Fund Performance
Jov Leon Frazer Enhanced Opportunities Fund net returns for month ended June 30, 2014 were:
 1 Month3 Month6 MonthYTD1 Year3 Year5 YearSince
Inception
Series I0.12 %-2.32 %-2.25 %-2.25 %6.48 %-12.46 %-4.98 %-8.00 %
Series II-0.05 %-2.76 %-2.27 %-2.27 %5.67 %-13.03 %-5.89 %-8.73 %
Series III0.10 %-2.36 %-2.33 %-2.33 %6.27 %-12.91 %-5.60 %-8.68 %
Blend: 40% S&P/TSX Comp., 60% S&P/TSX Venture Comp.4.19 %4.30 %10.73 %10.73 %19.97 %-9.74 %2.68 %-6.28 %
Historical Returns
The following chart shows the cumulative growth of $10,000 initial investment in the fund.
Sector Breakdown
As of June 30, 2014
Bonds31.65 %
Energy10.41 %
Financials8.84 %
Consumer Discretionary4.16 %
Information Technology3.98 %
Materials3.85 %
Utilities3.05 %
Industrials2.60 %
Health Care0.00 %
 
Top Holdings
As of June 30, 2014
EQUITY FINANCIAL HLDGS INC6.51 %
RAGING RIVER EXPLORATION INC4.68 %
CU INC4.14 %
ROGERS COMMUNICATIONS INC4.14 %
TELUS CORPORATION4.10 %
ENBRIDGE INC4.05 %
BELL CANADA3.94 %
BURCON NUTRASCIENCE CORP3.90 %
TRANSCANADA PIPELINES LTD3.87 %
FORTISBC INC3.71 %
Manager Commentary  As of February 28, 2014

Results of Operations

For the six-month period ended February 28, 2014, the Fund’s Class A Series I, Series II and Series III shares returned 8.97%, 9.07% and 8.86%, respectively. All three Series underperformed the Fund’s benchmark, comprised on a weighted basis of the S&P/TSX Composite IndexTM (the “TSX Index”) (40% weighting), which rose 13.99% on a total return basis, and the S&P/TSX Venture Composite IndexTM (the “Venture Index”) (60% weighting), which rose 9.16%. The combined benchmark returned 11.09% for the six months ended February 28, 2014.

General Market and Portfolio Review

The bulk of the assets of the Fund are invested in small capitalization companies (“small caps”) as a result of the Fund’s labour-sponsored status. While there was a market rally in the first two months of 2014, small cap companies in general, and resource-based small caps in particular, had an extremely difficult time over the past three years; since February 2011, the TSX Venture Exchange has lost 57% of it value. Jov Leon Frazer Enhanced Opportunities Fund by comparison has lost only 16% (Series III) relative to the industry, and remains in a very solid position to meet potential redemption requests.

A primary focus of the Fund during 2013 was to reduce the number of holdings in general, and the number of resource companies in particular. That focus continued through to February 2014. At end of the last fiscal period in August 31, 2013, the Fund held 43 names (34 Equity/Warrants, 9 Bonds), with Resources accounting for 17.6%. As of February 28, 2014, there were 35 names (25 Equity/Warrants, 8 Bonds) and Resources accounted for 8.8% of the Funds holdings. Cash remains high as we look for new opportunities in which to commit funds while we await the Federal government’s direction on the Labour Sponsored Fund tax credit issue. The Fund consists of a Reserve Pool (the bond holdings), an Investment Pool (the equity holdings) and Cash. At year-end, the Reserve Pool represented 30.2% of the Fund, the Investment Pool 48.2%, and Cash 22.3%. Cash and Reserves are held to meet potential redemptions.

Despite a double-digit total return for 2013, the Canadian equity market has dramatically lagged its global peers for the past two years, primarily a result of the commodity-nature of the Canadian market. So far in 2014, however, Canadian cyclicals (especially small-cap cyclicals) have begun to outperform, making up for past underperformance. We expect this trend to continue through the end of the year. We continue to expect slower-than-average economic growth, but growth nonetheless. The recent moves by the US Federal Reserve with respect to ending its Quantitative Easing program gives us comfort that a self-sustaining economic recovery, albeit slow, is underway.

Investment Objective

The Fund’s investment objective is to aim to achieve long-term capital appreciation by investing (a) in eligible investments which are comprised primarily of a diversified portfolio of equity and equity-like securities of listed issuers in compliance with the Federal Tax Act, and (b) in reserves as defined under the Federal Tax Act which are comprised primarily of debt and debt-like securities of Canadian corporations, provincial and federal governments and their agencies.

Portfolio Manager
 
Leon Frazer & Associates Inc.

Established in 1939 as one of the first investment counselling firms in Canada, Leon Frazer has been offering independent investment management services to clients for over 70 years. Leon Frazer offers a proven record of inflation protection through capital appreciation. The team of 17 investment professionals with an average of 30 years industry experience, and manages $2.1 billion in assets under management, as at December 31, 2012.

Fund Details
Fund Type: Retail Venture Capital
Inception Date: December 12, 2006
RRSP and TFSA Eligible: Yes
Management Fee: 2.50%
Minimum Initial Investment: $1,000
Minimum Subsequent Investment: $500
Series I (FE): JOV001
Series II (DSC): JOV002
Series III (DSC): JOV003
Distributions: n/a
Performance Fee: n/a
Fund Size: $3,420,292

Commissions, management fees and expenses all may be associated with an investment in the Jov Leon Frazer Enhanced Opportunities Fund (the “Fund”). The Fund is not guaranteed, its values change frequently and past performance may not be repeated.  The indicated rates of return for the Fund in the performance table are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends and distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Please read the prospectus before investing.

The opinions expressed in the portfolio commentary are those of the author and do not necessarily reflect the views and opinions of JovFinancial Solutions Inc. or any distributor of the Jov Leon Frazer Enhanced Opportunities Fund (the "Fund"). The views expressed are of a general nature and should not be interpreted as investment advice to you in any way. Please consult a qualified financial advisor before making an investment decision. The investment manager has a direct interest in the management and performance fees of the Fund, and may, at any given time, have a direct or indirect interest in the Fund or its holdings.