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Globe editors have posted this research report with permission of Echelon Wealth Partner. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
Looking back, 2016 was a rewarding year for investors, with the S&P/TSX Composite ahead 17.5 per cent, while the S&P/TSX Small Cap Index returned 21.1 per cent for 2016.
Our Canadian market returns significantly outpaced the DJIA, S&P 500 and the Russell Index gains of 13.4, 9.5 and 19.5 per cent, respectively.
Within our portfolio, we were rewarded by our view that smaller-capitalization names would experience a recovery after significant underperformance. Our Top Picks Portfolio returned 41.8 per cent, significantly outpacing the broader TSX Composite. This marked our third consecutive year of outperformance, with our Top Picks Portfolio ahead 90 per cent over that period against the TSE at 24 per cent.
Our outperformance continues to reflect the benefits of our focus on entrepreneurial, high-growth stocks where investors stand to gain by either the forecast growth driving a prospective revaluation of the company or by potential take-outs. We always consider exit scenarios but only after establishing a positive fundamental view on the company and its shares. That said, investors should consider our Top Picks Portfolio with the perspective that it is a high-risk, high-return portfolio with a narrow focus.
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