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NDX Growth & Income Fund

 

NGI.UN
CLASS U

Portfolio Manager Updates

 

Portfolio Manager Updates for 2016-12-31

As of December 31, 2016, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was C$7.51 versus C$7.60 on September 30, 2016. The NAV of the Class U unit on December 31, 2016 was US$7.66 vs. US$7.76 on September 30, 2016. Class A unitholders received distributions totaling C$0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the same period. The Class A units closing price on September 30, 2016 was C$7.58 representing a premium of 0.93% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Most global equity markets rallied strongly in the fourth quarter of 2016 with the majority of the performance coming after the election of Donald Trump as the President of the United States on November 8, 2016. The S&P/TSX Composite Index rose 4.5% while the S&P 500 Index in the U.S. was up 3.8%. Meanwhile, Asian markets declined during the period, dragging the international MSCI EAFE Index down 0.6%.

The Nasdaq 100 Equal Weighted Index was declining heading into the U.S. election but had a strong rally post the election of Donald Trump. However, for the quarter, the index ended up moving just marginally higher from 2,764.13 on September 30, 2016 to 2,793.66 on December 31, 2016. Stocks within the portfolio had varying returns. NVIDIA Corp. was the best performer which increased 56.01% during the quarter, while Amazon was the worst performing stock, down 14.12% in the portfolio.

Volatility moved higher heading into the U.S. Election as the Chicago Board Options Exchange Volatility Index (VIX) went from 13% on October 24th to 22.5% on November 4th. After the election, volatility declined swiftly hitting a low for the year on December 21st at 10.9%.

The Fund saw more opportunities in its covered-call writing during the period and ended the quarter with 9.8% of the portfolio written vs. 1.6% at the end of the previous quarter. On average, the Fund was written on about 6.4% during the quarter. The Fund was fully invested at the end of the quarter.

At the end of the quarter the Fund’s U.S. dollar exposure was 50% hedged.

 

Portfolio Manager Updates for 2016-09-30

As of September 30, 2016, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was C$7.60 versus C$7.09 on June 30, 2016. The NAV of the Class U unit on September 30, 2016 was US$7.76 vs. US$7.23 on June 30, 2016. Class A unitholders received distributions totaling C$0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the same period. The Class A units closing price on September 30, 2016 was C$7.31 representing a discount of 3.81% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets continued their slow and gradual climb higher during the third quarter shrugging off the surprise Brexit vote at the end of the second quarter. The S&P 500 Index advanced 3.85% during the period, while the S&P/TSX Composite rallied to close up 5.45% with fairly broad based sector gains.

The Nasdaq 100 Equal Weighted Index also had a strong rally during the period moving higher from 2,540.36 on June 30, 2016 to 2,764.13 on September 30, 2016. Stocks within the portfolio had varying returns. Nvidia Corp. was the best performer which increased 46.02% during the quarter, while Netflix was the worst performing stock, down 7.34%.
Volatility in the second quarter stayed subdued for the most part as measured by the Chicago Board Options Exchange NDX Volatility Index (VXN) which stayed below 20 for the quarter.

Due to lower price volatility, the Fund saw less opportunities in its covered-call writing during the period and ended the quarter with 1.6% of the portfolio written vs. 7.2% at the end of the previous quarter. On average, the Fund was written on about 4.9% during the quarter. The Fund was fully invested at the end of the quarter versus 15.6% cash at the end of the prior quarter.

At the end of the quarter the Fund’s U.S. dollar exposure was fully hedged.

 

Portfolio Manager Updates for 2016-06-30

As of June 30, 2016, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was $7.09 versus $7.45 on March 31, 2016. The NAV of the Class U unit on March 31, 2016 was US$7.23 vs. US$7.57 on March 31, 2016.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the same period.

The Class A units closing price on June 30, 2016 was $6.97 representing a discount of 1.7% to its underlying net asset value. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets continued marginally higher through the second quarter maintaining a steady but gradual uptrend from the lows made in the prior quarter. The S&P 500 Index advanced 1.89% during the period, while the S&P/TSX Composite rallied on the back of continued gains in Crude Oil and Gold since the lows in February to close up 4.22%. The referendum held on June 23 for Brexit - the vote to decide whether Great Britain would exit from the European Union - resulted in a surprise Leave vote that led to a brief selloff in markets and a spike in volatility but the market rallied impressively at month end to offset most of the losses as a result of the vote.

The Nasdaq 100 Equal Weighted Index ended lower during the period from 2,554.83 on March 31, 2016 to 2,540.36 on June 30, 2016.

Stocks within the portfolio had varying returns led by Kraft Heinz Co., which increased 13.97% during the quarter while Seagate Technology was the worst performing stock within the portfolio.

Volatility in the second quarter remained fairly benign as measured by the Chicago Board Options Exchange NDX Volatility Index (VXN) which stayed below 20 for most of the quarter but breached those levels at the end of the quarter as the Brexit vote drew near and on the surprise result. The Fund was active in its covered-call writing during the period and ended the quarter with 7.2% of the portfolio written vs. 4.9% at the end of the previous quarter. On average, the Fund was written on about 5.8% during the quarter.

As the quarter ended, the Fund’s cash position gradually increased because of a more defensive stance in light of the uncertainty surrounding the Brexit vote. At the end of the quarter, the Fund had 15.6% of the holdings in cash vs. 4.5% at the end of the previous quarter.

At the end of the quarter approximately 50% of the U.S. dollar exposure was hedged.

 

Portfolio Manager Updates for 2016-03-31

As of March 31, 2016, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was $7.45 versus $8.32 on December 31, 2015. The NAV of the Class U unit on March 31, 2016 was US$7.57 vs. US$8.07 on December 31, 2015.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the same period.

The Class A units closing price on March 31, 2016 was $7.14 which represents a discount of 4.2% to its underlying net asset value. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity market performance was “A Tale of Two Cities” in the first quarter of 2016. From the start of the year up to the lows on February 11, 2106, most global indices over 10% due to concerns surrounding global growth. The WTI Crude Oil spot price declined over 30% during the same period. Since then, many markets have advanced over 10% erasing most if not all of the losses incurred earlier in the year as global macroeconomic indicators started to show some signs of improvement. By the end of the quarter, the S&P/TSX Composite advanced 4.5%, the S&P 500 Index advanced 1.3%, while the WTI Crude Oil spot price ended the period down only 0.5% to end at US$36.94 per barrel.

The Nasdaq 100 Equal Weighted Index ended lower during the period at 2,554.83 from 2,624.87 on December 31, 2015.

Stocks within the portfolio had varying returns led by Mattel Inc., which increased 25.3% during the quarter after being a laggard in performance for the prior two years. Netflix was the worst performing stock within the portfolio .

The first quarter was fairly volatile, the Chicago Board Options Exchange Volatility Index (“VIX”) breached the 30 levels three times during January and February as a global growth scare led to greater nervousness among investors. The Fund was active in its covered-call writing during the period and ended the quarter with 4.9% of the portfolio written vs. 2.6% at the end of the previous quarter. On average the Fund was written on about 17% during the quarter.

As investment opportunities arose, the Fund’s cash position was reduced as markets started to rally and at the end of the quarter the Fund had 4.5% of cash vs. 5.7% at the end of the previous quarter.

The manager became more concerned with the Fund’s exposure to the US dollar during the quarter and increased the hedge to 100% of the U.S. dollar exposure from 50% hedged at the end of 2015.

 

Portfolio Manager Updates for 2015-12-31

As of December 31, 2015, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was $8.32 versus $7.94 on September 30, 2015. The NAV of the Class U unit on December 31, 2015 was US$8.07 vs. US$7.89 on September 30, 2015.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the same period.

The Class A units closing price on December 31, 2015 was $7.95 which represents a discount of 4.4% to its underlying net asset value. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets mostly advanced in the fourth quarter of 2015 with strong gains generated in October partially offset by weakness in December. The S&P 500 Index advanced 7.0% during the period, while the S&P/TSX Composite was an exception as it declined 1.4% due to weak commodity prices emanating from concerns surrounding slower growth in China and other emerging markets.

The Nasdaq 100 Equal Weighted Index increased during the period to 2,624.87 from 2,425.58 on September 30, 2015.

Stocks within the portfolio had varying returns led by NVIDIA Corporation, which increased 34.2% during the quarter and was up 13.8% alone on November 6, 2015 when it reported better than expected 3rd quarter earnings driven by strength in the PC gaming and automotive market. NXP Semiconductors, on the other hand, was a drag on performance, down over 16% during the period when it was held in the Fund, due to weak third-quarter revenue and guidance.

After a fairly volatile third quarter, the Chicago Board Options Exchange Volatility Index (“VIX”) declined in the fourth quarter to an average level of 17.1 for the period. The Fund was active in its covered-call writing during the period and ended the quarter with 2.6% of the portfolio written vs. 13.2% at the end of the previous quarter.

As investment opportunities arose, the Fund’s cash position was reduced during the period with an average cash position of 6.9% and ended the quarter at 5.7% vs. 23.9% at the end of the previous quarter.

The Fund ended the quarter with approximately 50% of the U.S. dollar exposure hedged back to the Canadian dollar.

 

Portfolio Manager Updates for 2015-09-30

On September 11, 2015, unitholders of the Fund approved a proposal to change the investment restrictions so that the Fund can invest in any equity security included in the NASDAQ-100 IndexSM (the “Index”) instead of being required to invest at least 75% of its net assets in the top 20 highest yielding constituents of the Index.

As of September 30, 2015, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN, was $7.94 versus $8.73 on June 30, 2015. The NAV of the Class U unit on September 30, 2015 was US$7.89 vs. US$8.80 on June 30, 2015.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the quarter.

The Class A units closing price on September 30, 2015 was $7.85 which represents a discount of 1.1% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets were down across the board in the third quarter of 2015 due to concerns surrounding slower growth in emerging market economies (most notably China) and the effects on global growth. Global indices were down anywhere from 6.9% for the S&P 500 Index to 28.6% for the Shanghai SE A Share market, with the flash crash on August 24th contributing most of the weakness. The resource heavy S&P/TSX Composite was also down 8.6% during the period, due to its dependence on emerging market’s demand for its resources.

The Nasdaq 100 Total Return Index declined during the period to 4,615.55 from 4,839.38 on June 30, 2015.

Stocks within the portfolio had varying returns led by two information technology companies, namely Facebook Inc. and NVIDIA Corporation, which increased 4.82% and 4.76% respectively for the Fund. Wynn Resorts continued to drag the performance, down 45.9% for the quarter and down 63.6% year-to-date. However, the Fund was able to avoid some of the massive decline by selling its entire position following the change in the investment strategy in mid-September. While the Fund did incur a decline of 28.6% in Wynn Resorts, it could have been worse if shareholders had not approved the change in the investment strategy.

Volatility was fairly subdued in July and the first half of August, but started to rise after the FOMC meeting in August when the minutes revealed there was less of chance for the Federal Reserve to embark on its first tightening cycle in over a decade. The Chicago Board Options Exchange Volatility Index (“VIX”) spiked over 45% to a level of 40.74 on August 24th, the same day as the flash crash when the Dow Jones Industrial Average was down more than 1,000 points intraday. The Fund was active in its covered-call writing during the period and ended the quarter with 13.2% of the portfolio written.

The Manager became more cautious and increased the Fund’s cash during the period. The Fund had an average cash position of 15.4% and ended the quarter at 23.9% vs. 3.0% in the previous quarter.

The Fund ended the quarter with approximately 70% of the U.S. dollar exposure hedged back to the Canadian dollar.

 

Portfolio Manager Updates for 2015-06-30

As of June 30, 2015, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was $8.73 versus $9.25 on March 31, 2015. The NAV of the Class U unit on June 30, 2015 was US$8.80 vs. US$9.22 on March 31, 2015.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the quarter.

The Class A units closing price on June 30, 2015 was $8.77 which represents a premium of 0.5% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets generated mixed returns in the second quarter of 2015 due to concerns surrounding whether Greece would exit the Eurozone or not. European markets felt most of the brunt of “Grexit” risk as the DAX 30 in Germany and CAC 40 in France declined 8.5% and 4.8% respectively. Although the Shanghai Class A market declined 7.2% in June, it was still the top performing market globally in the 2nd quarter, rising 14%.

The Nasdaq 100 Total Return Index increased slightly during the period to 4,839.4 from 4,756.4 on March 31, 2015.

Stocks within the portfolio had varying returns, led by Vodafone Group PLC which increased 15.2% during the period. Meanwhile, Wynn Resorts lagged the group considerably, down 21.3% as Macau’s gambling revenue continues to decline and the Company announced in April they would cut its dividend by 67% in order to conserve cash.

Volatility during the quarter remained towards the low end of the range it has traded in the past few years. The Fund has been selective in its covered call writing and ended the quarter with 12.7% of the portfolio written.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 3.0% vs. 2.4% at the end of the previous quarter.

The Fund also ended the period with approximately 80% of the U.S. dollar exposure hedged back to the Canadian dollar.

 

Portfolio Manager Updates for 2015-03-31

As of March 31, 2015, the Net Asset Value of the Class A unit was $9.25 vs. $9.79 on December 31, 2014. The NAV of the Class U unit on March 31, 2015 was US$9.22 vs. US$9.74 on December 31, 2014.

Class A unitholders received a regular distribution of $0.15 per unit during the quarter, while Class U unitholders received a regular distribution of US$0.15 per unit during the quarter.

The Class A units closing market price on March 31, 2015 was $9.12 which represents a discount of 1.4% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Global equity markets advanced in the first quarter of 2015, albeit at differing degrees as Europe, China and Japan led the way on optimism that recent quantitative easing measures by their respective central bank would have a similar effect that it did for U.S. markets.

The Nasdaq 100 Total Return Index increased during the period to 4,756.38 from 4,634.7 on December 31, 2014.

Stocks within the portfolio had varying returns led by Kraft Foods Group, which increased 39%. Kraft announced on March 25th it was being acquired by HJ Heinz Co., while, Mattel Inc. lagged the group, down 25.2% on declining sales for its Barbie and Fisher-Price brands.

After starting off 2015 at elevated levels, volatility slowly declined to end the first quarter at the low end of the range for the past few years. The Fund has been selective in its covered-call writing and ended the quarter with 36.7% of the portfolio written.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 2.4% vs. 1.2% at the end of the previous quarter. The Fund also ended the period with approximately 50% of the U.S. dollar exposure hedged back to the Canadian dollar.

 

Portfolio Manager Updates for 2014-12-31

As of December 31, 2014, the NAV of the Class A unit, NGI.UN was $9.79 versus $9.43 on September 30, 2014. The NAV of the Class U unit on December 31, 2014 was US$9.74 vs. US$9.37 on September 30, 2014.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the quarter.

The Class A units closing price on December 31, 2014 was $9.58 which represents a discount of 2.1% to its underlying net asset value. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

Most global equity markets retreated in the early part of the fourth quarter of 2014 on concerns around the U.S. Federal Reserve ending quantitative easing in October, a substantial decline in energy commodity prices as well as deflation risks surrounding Europe and Japan. However, most markets rebounded strongly into the end of the year as U.S. payrolls continued to strengthen and third quarter GDP in the U.S. came in well above expectations at 5%.

The Nasdaq 100 Total Return Index increased during the period to 4,634.71 from 4,418.35 on September 30, 2014. Stocks within the NDX Growth and Income Fund portfolio had varying returns during the quarter, led by office supply giant Staples Inc. (“Staples”) which increased 50.8% during the period. The stock jumped 8.7% on December 11th alone, after it was reported that activist hedge fund manager Starboard Value had bought a 51% stake in Staples and also increased its stake in Office Depot to 9.9%. On February 4, 2015, it was announced that Staples Inc. had entered into a definitive agreement to acquire Office Depot Inc. for US $5.67 billion. Meanwhile, VimpelCom, Ltd. (“VIP”) lagged the group again, down 41.8% during the period as concerns increased over the company’s high debt level after the company cut its dividend by 92% to $0.035 per share on November 17, 2014.

Volatility levels remained at the low end of the range for most of the period and the Fund was less active with its covered call writing. The Fund ended the quarter with 3.0% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the majority of the period and ended the quarter with a cash position of 1.2% vs. 5.1% at the end of the previous quarter

The Manager remains very positive on companies within the NDX Growth and Income Fund due to their leverage to an improving U.S. and global economy, strong corporate earnings and balance sheets as well as their ability to continue to return more capital to shareholders in the form of increasing dividends and share buybacks.

 

Portfolio Manager Updates for 2014-09-30

As of September 30, 2014, the NAV of the Class A unit, NGI.UN was $9.43 versus $9.66 on June 30, 2014. The NAV of the Class U unit on September 30, 2014 was US$9.37 vs. US$9.63 on June 30, 2014.

Class A unitholders received distributions totaling $0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the quarter.

The Class A units’ closing market price on the Toronto Stock Exchange (TSX) as of September 30, 2014 was $9.20 which represents a discount of 2.4% to its underlying net asset value. The Fund’s Class U units are not listed on the TSX.

Many global equity markets reached all-time highs during the third quarter of 2014 before retreating into the end of the period due to concerns about slowing global growth as well as deflation risks surrounding Europe and Japan. U.S. equities outperformed Canadian and International stocks during the period, especially when converted into Canadian dollars as the U.S. dollar rose 4.7% vs. the Loonie.

The Nasdaq 100 Total Return Index increased during the period to 4,418.35 from 4186.87 on June 30, 2014. Stocks within the NDX Growth and Income Fund had varying returns during the quarter led by Intel Corporation (“INTC”), which increased 13.5% during the period. The stock jumped 9% on Wednesday, July 16th alone, after reporting second quarter net income of $2.8 billion and earnings per share of $0.55, both up 40% and 41%, respectively. Meanwhile, Mattel, Inc. (“MAT”) lagged the group, down 20.5% during the period as second quarter revenues and earnings came in below consensus expectations as Barbie sales declined 15% in the quarter.

Volatility levels remained at the low end of the range for most of the period but did start to rise towards the end of September as the S&P 500 started to sell off after reaching an all-time high on September 19, the same day that Chinese e-commerce company Alibaba became the biggest initial public offering ever. The fund was less active with its covered call writing for most of the period but did increase the call writing into the end of September as volatility rose. The Fund ended the quarter with 3.6% of the portfolio subject to covered calls.

The fund maintained a high investment position during the majority of the period and ended the quarter with a cash position of 5.1% vs. 2.3% at the end of the previous quarter

The Manager remains very positive on companies within the NDX Growth and Income Fund portfolio due to their leverage to an improving U.S. and global economy, strong corporate earnings and balance sheets as well as their ability to continue to return more capital to shareholders in the form of increasing dividends and share buybacks.

 

Portfolio Manager Updates for 2014-06-30

As of June 30, 2014, the net asset value (“NAV”) of the Class A unit, NGI.UN was C$9.66 versus C$9.54 on March 31, 2014. The NAV of the Class U unit on June 30, 2014 was US$9.63 vs. US$9.52 on March 31, 2014.

Class A unitholders received distributions totaling C$0.15 per unit during the quarter, while Class U unitholders received distributions totaling US$0.15 per unit during the quarter.

The Class A units closing price on June 30, 2014 was C$9.14 which represents a discount of 5.4% to its underlying NAV. The Fund’s Class U units are not listed.

After posting mixed returns during the first quarter of 2014, global equity markets resumed their uptrend in the second quarter, as economic data out of the United States started to rebound from the weakness driven by harsh weather experienced this past winter.

The Nasdaq 100 Total Return Index increased during the period to 4,187.87 from 3,897.72 on March 31, 2014. Stocks within the NDX Growth and Income Fund had varying returns during the quarter led by trucking and logistics giant C.H. Robinson Worldwide Inc. (CHRW), which increased 22.5%, mostly after reporting better than expected first quarter results. Meanwhile, VimpelCom Ltd. (VIP) lagged the group for the second consecutive quarter, down 7% during the period due mostly to the continuing Russia – Ukraine tensions as VIP has almost 40% of its telecom revenues coming from Russia.

Volatility levels remained at the low end of the historical range during the period. Due to the low level of volatility, the Fund continued to be less active with its covered call writing during the period and ended with 6.6% of the portfolio subject to covered calls.

The Fund maintained a high investment position during the majority of the period and ended the quarter with a cash position of 2.3% vs. 1.8% in the previous quarter.

The Manager remains very positive on companies within the NDX Growth and Income Fund due to their leverage to an improving U.S. and global economy, strong corporate earnings and balance sheets as well as their ability to continue to return more capital to shareholders in the form of increasing dividends and share buybacks.

 

Portfolio Manager Updates for 2014-03-31

As of March 31, 2014, the Net Asset Value (“NAV”) of the Class A unit, NGI.UN was C$9.54 versus C$9.44 on December 31, 2013. The NAV of the Class U unit on March 31, 2014 was US$9.52 vs. US$9.44 on December 31, 2013.

Class A unitholders received distributions totaling C$0.1712 per unit during the quarter, while Class U unitholders received distributions totaling US$0.1712 per unit during the quarter.

The Class A units’ closing price on March 31, 2014 was C$9.70 which represents a premium of 1.7% to its underlying NAV. The Fund’s Class U units are not listed on any stock exchange.

After performing strongly in 2013, global equity markets posted mixed returns for the first quarter of 2014 due to geo-political tension between Ukraine and Russia as well as concerns that U.S. Federal Reserve might start to raise interest rates sooner than expected.

The Nasdaq 100 Total Return Index increased slightly during the period to 3,897.72 from 3,881.55 on December 31, 2013. Stocks within the NDX Growth & Income Fund had varying returns during the quarter led by Garmin Ltd. (GRMN) which increased 20.6% on better than expected 4th quarter results while VimpelCom Ltd. (VIP) lagged the group, down 30.2% during the period due mostly to its exposure to the Russian telecom market with almost 40% of its revenues coming from Russia.

Volatility levels rose briefly at the end of January to around 21.5 after it was reported that Russian troops were occupying Crimea, an autonomous republic of Ukraine. The CBOE SPX Volatility Index (VIX) averaged just under 15 for the first quarter of 2014. Due to the low level of volatility, the Fund was not very active with its covered call writing during the period and ended with approximately 12% of the portfolio subject to covered calls.

After closing the Fund on December 19, 2013, the Fund’s proceeds were fully invested by the end of January 2014. The Fund maintained a high investment position during the period and ended the quarter with a cash position equal to 1.8% of its NAV.

The Manager remains very positive on companies within the portfolio universe of NDX Growth & Income Fund due to their leverage to an improving U.S. and global economy, strong corporate earnings and balance sheets as well as their ability to continue to return more capital to shareholders in the form of increasing dividends and share buybacks. All of this while at the same time trading at attractive valuations on both an absolute and relative basis.

 

Portfolio Manager Updates for 2013-12-31

As of December 31, 2013, the NAV of the Class A unit, NGI.UN was $9.44 versus the initial NAV of $9.32 on the closing date of December 19, 2013. The NAV of the Class U unit on December 31, 2012 was US$9.44 vs. US$9.33 on December 19, 2013. The Class A units closing price on December 31, 2013 was $9.96 which represents a premium of 5.5% to its underlying NAV. The Fund’s Class U units are not listed on the Toronto Stock Exchange.

No distributions were paid during the period as the first quarterly distribution is scheduled for March 31, 2014 and will be pro-rated to reflect the period from the closing date on December 19, 2013 until March 31.2014.

Global equity markets continued to advance in the fourth quarter of 2013 with many indices finishing the year at new all-time highs reflecting improved global economic data and accommodative central bank monetary policy.

During the period starting December 19, 2013, the Nasdaq 100 Total Return Index increased from 3,791.48 to 3,881.55 on December 31, 2013. Stocks within its portfolio had varying returns led by Cisco Systems Inc. (“CSCO”) which increased 6.81% while, Maxim Integrated Products, Inc. (“MXIM”) lagged the group, down 1.8%.

Volatility levels remained low for the period with the CBOE SPX Volatility Index (“VIX”) back to levels not seen since 2007. The Fund wrote no calls during the period.

As at December 31, 2013, the Fund was about 60% invested as the trading liquidity during the holidays declined and the Manager decided to resume investing the proceeds of the offering throughout January 2014.

The Manager remains very positive on the securities comprising the portfolio due to their leverage to an improving U.S. and global economy, strong corporate earnings and balance sheets as well as their ability to continue to return more capital to shareholders in the form of increasing dividends and share buybacks. All of this while at same time trading at attractive valuations on both an absolute and relative basis.

 

 

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