The fund uses a purely fundamental investing approach to create a concentrated portfolio of high-conviction ideas. LSIF focuses on areas of the market where we can gain an informational advantage and identify market inefficiencies that larger institutions can't.
The Laurier Student Investment Fund runs a concentrated portfolio (between 10-20 holdings) of small and micro cap North American holdings. Before buying any security, the fund does extremely deep due diligence on its names.
This process typically involves a complete financial model, an in-depth investment thesis report, calls with company management, and a presentation in front of the fund members, professors and LSIF alumni.
The rationale for this strategy is simple:
Due to minimal sell-side coverage and restrictive policies surrounding institutional funds, micro cap & small cap companies are often left uncovered and thus, mispriced
As a result, institutional investors tend to avoid doing deep due diligence on smaller firms, allowing LSIF to uncover undervalued companies before others do
Larger companies tend to be well covered and understood by the investment community. This reduces the probability of the company being undervalued, and thus, the potential for large returns
Since inception, the LSIF Strategy has:
Yielded a 13.2% CAGR, vs a 6.9% CAGR of the S&P TSX Total Return Composite Index
Grown from an initial value of $126,000 to approximately $900,000 today