Linde Equity Fund2020-01-02T11:21:35-08:00

Linde Equity Fund

The Linde Equity Fund enables investors to participate in the top investment ideas of Linde Equity.  With an inception date of October 7, 2016, the fund invests in two primary areas: growth stocks and dividend growth stocks.  A wide net is cast across the stock universe to seek out the most attractive securities on a risk adjusted basis.  Canadian and US large-caps, mid-caps, small-caps, as well as overseas companies trading on US exchanges, are all considered. Companies with superior business models, high returns on invested capital, and large market opportunities to sustain rapid EPS growth are prioritized.

Minimum Account Size:

$250,000 per household

Types of Accounts:

Cash, RRSP, SRSP, RRIF, LIF, LIRA and Corporate

Concentrated Approach

The Linde Equity Fund also presents a concentrated approach to investing.  In a typical portfolio of mutual funds, each fund will own up to 50 or 100 securities to be diversified.  This results in a client’s portfolio owning hundreds of average stocks in aggregate across multiple funds.  In contrast, the Linde Equity Fund cherry picks the most attractive securities from particular asset classes and sectors placing them in a single fund.  Instead of dilution and over-diversification, the Linde Equity Fund offers investors a concentrated portfolio of 30 to 40 top picks.

Keeping clients informed

We keep our clients informed on their fund investment with a quarterly report detailing all the positions they own in the fund, which stocks we bought and sold during the quarter, and providing our reasons.  This is part of our commitment to keep you aware of what you own and why.  Differentiating ourselves from the mutual fund industry, we also make a habit of phoning each fund client either on a quarterly, semi-annual, or annual basis (depending on their preference) as a courtesy call to discuss the quarterly report and answer any questions you may have.  This is a service our high net worth Investment Counsel clients have been enjoying since 2003.  We are pleased to extend this personalized communication to our fund clients.

Linde Equity’s investment approach centers on pursuing superior risk adjusted investment returns through investment in publicly traded securities.  Linde Equity seeks the most attractive securities based on a total return basis.  The total return mandate involves identifying securities that offer either significant capital appreciation potential, a high income yield, or a combination of capital appreciation and income.

Among the types of securities deemed most attractive on a total return basis, Linde Equity prioritizes investment in pure capital appreciation common stocks.  Linde Equity believes that investing in common shares of rapidly growing companies generating high returns on invested capital, with superior business models and large market opportunities, create the most shareholder value over the long term.

While businesses sustaining high returns on their reinvested profits year after year to perpetuate rapid earnings growth are ideal for investment portfolios, they are rare to find.  Consequently, Linde Equity invests considerable effort to search for such growth companies.  Searching through the entire stock universe, Linde Equity researches Canadian and US large-caps, mid-caps, small-caps, as well as overseas companies trading on US exchanges.  Linde Equity also considers growth stocks from all industries and sectors.

     “The person who turns over the most stones wins!”

–  Peter Lynch

Common shares offering a combination of capital appreciation and income are also an important part of Linde Equity’s model portfolio.  These are commonly known as dividend growth stocks.  While not offering as much upside as pure capital appreciation stocks, which typically pay little or no dividends, dividend growth stocks increase portfolio stability while offering attractive risk adjusted return potential on a total return basis.  Shares of companies with strong business models and a high return on invested capital are also sought.  These two traits enable both earnings and dividends to grow over the long term.

By casting a wide net and cherry picking the most attractive growth stocks and dividend growth stocks from across the stock universe, Linde Equity offers investors with tolerance for moderate volatility an opportunity to achieve superior risk adjusted returns over the long term.

Our investment newsletter, the Linde Equity Report has achieved an average annualized return in excess of 20% for over 18 years. It has enjoyed numerous #1 rankings by the Hulbert Financial Digest. This performance is a result of successfully converting a higher risk investment approach into high returns. The Linde Equity Fund, however, prioritizes preservation of capital and earning a reasonable return. It is much safer than the newsletter.

In terms of what return to expect for the Linde Equity Fund, we believe a net 7 to 8 percent annualized return over the long term should be achievable, but is not guaranteed, without taking excessive risk. Our fund could achieve greater than a 10% annualized return through a market cycle if it were to own the kind of big winners, 10 baggers, enjoyed in the past by our clients. However, these types of stocks are rare, and we cannot promise that we will be able to profit from similar winners in the future.

The Linde Equity Fund is only available to clients of Linde Equity. The minimum investment to become a client is $250,000 on a per household basis.

Your investment in the Linde Equity Fund will be held in your own individual client account at our custodian, National Bank Independent Network, a subsidiary of National Bank of Canada. National Bank Independent Network is the leading provider of custody and record keeping services for independent portfolio management firms in Canada (approximately $87 billion in assets, 400 relationships, and over 500,000 end clients). Linde Equity never possesses client funds at any time, but merely has trading authority in an account that is entirely in your name with the custodian. The custodian also provides monthly statements, tax slips and online account access.

Canada is known to have the highest mutual fund expenses in the world. Canadian equity funds are commonly cited as having MERs (Management Expense Ratio) of around 2.5%. The Linde Equity Fund’s MER is capped at 1.25%.

The mandate of the Linde Equity Fund is preservation of capital and earning a reasonable return. While the Linde Equity Report is high risk, the Linde Equity Fund is much more conservative. With activity commencing on October 7, 2016, the Linde Equity Fund’s quarterly performance is below:

Q1 Q2 Q3 Q4 YTD/Year
2019 +13.4% +2.7% +1.2% +4.2% +22.8%
2018 -1.4% +5.0% +2.6% -11.1% -5.5%
2017 +4.6% +2.5% +1.5% +4.7% +14.0%
2016 +1.1%

Pre-Dist NAV for December 31, 2019: $13.22

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If you are you interested…

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