Tetrem Capital Management - CI Investments

Portfolio constructionTetrem constructs its portfolios through individual stock selection, within the context of its guidelines. The most significantcomponents of its investment decision are valuation and margin of safety. The companies monitored by the Tetrem teamare classified into different buckets: actual holdings, watch list companies (close to a buy level), and long watch companies(which they would like to own, but at a lower price). Once price targets are established, holdings and watch list stocksare ranked to determine the ratio of upside potential versus downside risk. The typical hurdle rate for a new investmentis 3:1, which means that it offer $3 of upside potential for every $1 of downside risk.Tetrem portfolios are concentrated in a relatively small number of holdings based on the managers’ conviction, which inturn is influenced by the key investment criteria mentioned previously: valuation, mean-reversion, economic moat andrisk. The size of a holding is correlated with the number of these criteria that are met. The portfolio’s cash position is aresult of Tetrem’s equity process, and typically accounts for 2% to 5% of the portfolio.Tetrem’s expertise is available throughthe following Castlerock funds:Castlerock Canadian Dividend FundThe fund’s objective is to achieve a balance between high dividend income and capital growth by investing mainly in adiversified portfolio of Canadian common stocks that are paying a dividend or are expected to pay a dividend and, toa lesser extent, in high-yield preferred shares and interest-bearing securities.Castlerock Canadian Value FundThe fund seeks long-term capital appreciation by primarily investing in common shares of established Canadian issuersthat are undervalued relative to their intrinsic value.Castlerock Capital Appreciation FundThe fund seeks growth of capital by investing primarily in United States stocks selected on the basis of potential forcapital appreciation.