Canada remains the main investment focus for Boston-based Robert Haber, an American who formerly headed Fidelity's "Team Canada" and is now a sub-advisor for Calgary-based Canoe Financial LP. "I believe that, eventually, there will be a bull market of significance in Canada in equities," says Haber, CEO and chief investment officer at Haber Trilix Advisors, LP. "Canadians will play and play hard. We want to be in a position to invest there and also to have products to serve that need."
Haber's biggest role at Canoe -- whose mantra is "Go Canada" -- is managing the $1.3-billion Canoe EnerVest Diversified Income Trust (EIT.UN/TSE). He says this fund best illustrates the investment philosophy that runs throughout his mandates. He also manages two other closed-end funds -- Canoe Strategic Resources Income (CSR.UN/TSE) and Canoe GO CANADA Income (GCI.UN/TSE), which are both set to merge into one of Canoe's open-end funds later this month -- as well as the open-end Canoe Canadian Equity Class and Canoe Canadian Asset Allocation Class. In all, Haber manages approximately $1.5 billion for Canoe.
Haber made "massive changes" when he took over Canoe EnerVest Diversified Income in November 2010. At that time, the fund was populated almost exclusively with income trusts "that were going away pretty quickly at that point" because of federal tax changes. As well, even though Haber is a "big bull on materials and energy," the fund was not diversified among the various sectors and did not have any U.S. holdings.
That situation has been addressed, since the portfolio now has exposure to all 10 main sectors of the market and includes U.S. holdings. The fund invests in a range of market capitalizations, and the portfolio's above-average dividend yield offers some downside protection. Even so, the fund's sector mix reflects the Canadian stock market's heavy concentration in the resources and financial-services sectors. As of Sept. 30, the fund's 59 holdings were weighted 30% in the energy sector, 26% in financials and 17.5% in materials.
Haber's investment discipline is growth at a reasonable price, and he takes a longer-term view. The stocks that he favours have higher rates of sales growth than the S&P/TSX Composite Index as a whole. "It's buying stocks that grow faster than the market, and paying less than the market pays for the average stock," he says. "If I do that often enough, like I did in my prior 25 years, I'll win. Especially when you have all these extra qualities of diversification and yield."
The biggest position in all of Haber's equity mandates is the heavy-oil producer Suncor Energy Inc. SU "Suncor has a better balance sheet today, compared to 2009, when the market kind of crashed," he says. "The dividend yield is much higher, and it's cheaper on a price-to-cash-flow basis." He adds that Suncor is also one of the fastest "dividend growers" on the Toronto Stock Exchange. "They've grown their dividends over these last five years by 22% a year, and that is just music to my ears. I could hold this for as long as it stays even reasonably priced."
Robert Haber | |
The investment team headed by Haber includes another portfolio manager and fundamental, quantitative and technical analysts. He considers it essential to have three types of analyst opinions. "I don't think many small firms are committed to a variety of research disciplines," says Haber, "and I've been around the block a couple of times."
Haber, 54, received a bachelor of science from Tufts University in 1979, followed by a master's of science degree in chemical engineering in 1980. Upon graduation, he joined Exxon Corp. before moving to the consulting firm McKinsey & Co. in 1984. In 1985, he joined Fidelity Investments and also earned an MBA from Harvard Business School that year. He received the CFA designation in 1990.
A veteran of 25 years with the Fidelity organization in Boston, Haber was for 12 years the chief investment officer of the firm's Canadian subsidiary, Fidelity Investments Canada. In that role, he formed the investment-management division that was nicknamed Team Canada and was responsible for overseeing more than $20 billion in assets.
After taking a sabbatical in 2009 and writing the investment book GO Canada, published by Fenn Publishing Co. in 2010, Haber went into business for himself. He launched Haber Trilix Advisors in November 2010. Given his "bigger-picture thesis" of Canadian investments, there was no better partner than the oil experts who run Canoe, says Haber. Canoe's principals share his belief that macroeconomic trends favour investing in Canada. "Especially in the areas of strategic resources and the banks," says Haber. "You really don't need to take some of the other risks, including currency risk, and go to another country or continent. So that's how the GO Canada comes in there."