The top fund manager in Canada’s equity market, Ismael Chiadmi, employs a strategy grounded in the research of Narasimhan Jegadessh, finance chair at Emory University’s Goizueta Business School. Jegadessh’s research partner in the study is Sheridan Titman, a professor at the University of Texas at Austin.
Bloomberg recently published an article highlighting Chiadmi’s success and the use of Jegadessh and Sheridan’s research.
Chiadmi, manager at Montrusco Bolton Investments Inc., has returned 12 percent including dividends for the Quantitative Canadian Equity Fund (MONTBQCE) this year using a price momentum strategy. That puts him first among a group of 14 Canadian funds with at least 90 percent of holdings in Canada and assets of C$100 million ($96 million) or more, data compiled by Bloomberg show.
Chiadmi has quadrupled the 3.1 percent total return of the benchmark Standard & Poor’s/TSX Composite Index (SPTSX), highlighting how the right strategy can succeed even in underperforming markets. The S&P/TSX is the worst-performing among Group of Seven countries this year amid bear markets in commodities from copper to silver.
“It’s based on investor behavior,” said Chiadmi, 55, who has managed the fund for Montrusco Bolton since 2006. ’’People tend to keep buying stocks that were bought during a certain period. If a stock rallies they will keep buying it, which is what my strategy is capturing.’’