2009/04/07 00:00:00

The PPS Equity Fund has underperformed its benchmark by just over 1.5% over one year. The benchmark in turn has lost close to 1/4 of its value. Both are causes for disappointment, but both are reminders that we are in this for the long-haul. The value focus of the underlying managers in your portfolio has hurt the performance of the portfolio in the short-term as the market has favoured defensive counters that your managers have felt are dearly priced. The critical issue facing our equity managers over the next 12 to 18 months is not so much what they don't hold in your portfolio, but rather that they avoid those companies that are cheap for a reason. There is always a risk a manager gets this wrong (i.e. they invest in something that looks like good value, but isn't). That's why we spend significant time carefully understanding our managers' processes and how they're positioned.