Newsletter - Q2 2020

Evovest activities during Q2 2020 and performance updates.

About Evovest

Evovest automates stock market investment decision-making with a scientific approach. Machine learning allows us to identify the best potential investments by analyzing financial and macroeconomic information. Our approach stands out by integrating best practices in portfolio management and artificial intelligence. Our commitment is to generate superior returns through an innovative approach at a competitive cost. We are a portfolio management company registered with the Autorité des marchés financiers (AMF) and the Ontario Securities Commission (OSC).

Quarterly update

The last quarter was another surprising one, with one of the fastest market recoveries ever recorded. The first half of the year thus posed an important test for the robustness of our strategies, all of which stood out by creating value.

We are very proud to officially announce the addition of Michel Tremblay as Chairman of the Board of Directors at Evovest. Michel brings extensive experience in the financial markets. He held several positions related to investments at ING Investment Management and National Bank. Subsequently, he joined iA Financial Group from 2008 to 2019 where he was Executive Vice President and Chief Investment Officer. He was responsible for managing the company’s general fund and investment funds, which totaled $ 89 billion as of December 31, 2018. He will oversee the strategic aspects of the business.

We are also pleased to announce the appointment of Guillaume Beauregard as Chief Compliance Officer at Evovest. His responsibilities are in addition to those of chief operating officer. This change is part of our efforts to provide Evovest with best governance practices and to highlight Guillaume’s significant contribution.

Our investment process is still evolving and major developments were implemented in June. In order to be able to adapt more quickly to the stock markets, we have moved from a monthly database to a daily database. In addition, we integrate explicit risk management through joint prediction of excess return and volatility. To finish, an automated process now ensures compliance with customer investment policy, thereby facilitating human supervision.

Lastly, we are implementing new investment strategies. It is now possible to have tailor-made mandates relating to benchmarks chosen by the client or market neutral strategies tailor-made from the available geographies.

Strategy performance

Global Equity

With the recovery during the quarter, the strategy was well positioned and captured the market rebound and surpass by +3.6% the benchmark. This adds to the value creation of this strategy, which brings it to +5.6% vs its benchmark on an annualized basis since its launch on January 31st, 2019.

2019-01-31 to 2020-06-30 Evovest Benchmark*
Annualized Returns 8.2% 2.6%
Annualized Volatility 16.7% 18.4%
Beta 0.87 1.00
Q2 2020 Returns 18.0% 14.4%
*Benchmark: equal-weighted portfolio of the world's largest capitalization in CAD (1500+ holdings).

North American Equity

Having slightly outperformed at the start of the year, the strategy was also well positioned to capture the stock market rebound but underperformed by 1.0%. However, the value creation of this strategy is still +7.4% vs its benchmark on an annualized basis since its launch on November 1st, 2018.

2018-11-01 to 2020-06-30 Evovest Benchmark*
Annualized Returns 11.9% 4.4%
Annualized Volatility 23.3% 24.4%
Beta 0.80 1.00
Q2 2020 Returns 24.0% 25.0%
*Benchmark: 50% of Canadian large-cap & 50% of US large-cap in CAD.

North American Market Neutral Equity

The North American market neutral equity mandate had a return on May 31st, 2020 of -5.5% for the year 2020. In June, our newly integrated process adapted very well to changing market conditions to take advantage of opportunities, for a return +9.6%. Since the creation of the strategy on November 1st, 2018, it has annualized +5.9%.

2018-11-01 to 2020-06-30 Evovest
Annualized Returns 5.9%
Annualized Volatility 9.0%
Beta* 0.07
Q2 2020 Returns 6.1%
*Beta computed against 50% of Canadian large-cap & 50% of US large-cap in CAD.
The returns presented in CAD include transaction costs, but exclude management and operating fees. Past performance is not indicative of future results.

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