Canadian General outperforms

23rd Feb 2011 12:04

Canada-focused investment company Canadian General Investments (CGI) net asset value (NAV) per share shot up by almost a quarter in 2010, largely on the back of its exposure to raw materials stocks.NAV per share at the end of 2010 stood at C$24.04, up from C$19.27 at the end of 2009. The NAV return, with dividends reinvested, for the year ended December 31, 2010 was 30.3%, compared with a 17.6% total return for the benchmark S&P/TSX Composite Index.By the close of business on 18 February 2011, the NAV per share had risen further to C$25.19."CGI's outperformance can largely be attributed to an overweighting in the materials sector and an underweighting in the financials sector relative to the index. Materials was the second best performing sector in the index, returning 36.5% for the year and contributed nearly half of the total return of the index. Conversely, the financials sector, while returning an acceptable 10.5% for the year, underperformed the overall Index, and managed to contribute to a proportionally small fraction of the overall performance of the index," the company said. Additionally, the gearing afforded by the $150m in preference shares the company has outstanding, served to enhance the move up of the NAV. With a strong rebound in 2009 and 2010, cash and short-term securities balances were returned to their historical low levels.