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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Learn more

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Learn more

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With the Canada Life Pathways segregated funds, you can offer your clients a full range of high conviction and concentrated mandates, managed by leading institutional fund managers. Some of these fund managers are exclusively available to Canadian segregated fund clients through Pathways funds.

Our new Pathways segregated funds are exceptional building blocks for a solid portfolio. This gives your clients the benefit of investments with high conviction – keeping true to their specific methodology -and concentrated mandates. It also ensures a small and focused selection of stocks and transparency in asset allocation. With Pathways segregated funds, you and your clients get all of this in funds that proudly carry the new Canada Life name.

Bo Knudsen, M.Sc, Portfolio Manager
C WorldWide Asset Management

Bo Knudson:                     
Hi, I'm Bo Knudsen. Welcome to my city, Copenhagen. This is C WorldWide. We're very pleased to be part of your fund shelf. I really look forward to telling you more about who we are.
Tyler Wiley:                      
Hey, Bo. Welcome to Toronto.
Bo Knudson:                     
Thanks, Tyler. Great to be here in a sunny day.
Tyler Wiley:                      
So, Bo, have you been to Toronto before? What do you think of the city?
Bo Knudson:                     
I've been here several times over the last 15 years, and I must say, it's become a big city. Becoming a big, bold city, I really like it here.
Tyler Wiley:                      
Nice. Is there anything you like to do when you visit a new city?
Bo Knudson:                     
I like to put on my jogging shoes and run around the town to find the greenspace. And just hang out there and read a bit.
Tyler Wiley:                      
Nice.
Bo Knudson:                     
I like that.
Tyler Wiley:                      
So, let's talk a little bit about institutional investing. Why is it important to be an institutional investor?
Bo Knudson:                     
I've been in this business, institutional fund management, for 30 years. The good thing is you get challenged at the highest level. And I think if you get challenged at the highest level, you get better. I think competing with the best, being challenged, that's what you get out of being in the institutional business.
Tyler Wiley:                      
Okay. So, investment process, walk us through your investment process, and maybe tie in a recent transaction that'll help highlight how you run the fund.
Bo Knudson:                     
Absolutely. Our view is you don't need more than 30 stocks. We identify companies that have secular tailwinds, and then we typically stay with these names for a very long period of time. One stock that we have added recently is a Japanese company called Hoya. They benefit from the aging world population.
Bo Knudson:                     
Basically, more people in the world need quality glasses, and they are one of the leading manufacturers of lens to glasses. On top of that, they are the world expert in producing flat glass. So, basically, a piece of glass the size of a book costs you the same as a small car. You need that kind of pureness and flatness and the specifications for semiconductor manufacturing. And here, Hoya is very strong as well.
Tyler Wiley:                      
Great. So, 30 holdings in a global portfolio is quite concentrated. Walk us through some of the benefits of being so concentrated.
Bo Knudson:                     
Then you really need to believe what you invest in. We think that having 30 gives you proper diversification, but you get the benefit if a company really does well. Our expertise is to find the best stocks. We don't want to dilute our own capabilities by just adding names to the portfolio. We don't want and we've never had more than 30.
Tyler Wiley:                      
Okay. So, we went through a manager selection process in which C Worldwide was successful on a global mandate. How is that selection process from your perspective?
Bo Knudson:                     
Speaking on behalf of myself and the team, this is one of the most detailed processes that I've been through over the years. So, very qualified people, very detailed process, very thorough process definitely.
Tyler Wiley:                      
Great. So, where does the name C WorldWide come from?
Bo Knudson:                     
It comes from our core, that we are global explorers. We try to find the best stocks in the world, and, therefore, we have to have a global perspective, so to see worldwide. We think that explains the essence of what we are all about.
Tyler Wiley:                      
So, if C WorldWide was a car, what car would you be?
Bo Knudson:                     
Hmm. I think we would be a fast Volvo.
Tyler Wiley:                      
Alright.
Bo Knudson:                     
With stability, but also with growth. And there are fast Volvos out there, I can tell you.
Tyler Wiley:                      
Great. Well, thanks very much for taking the time to meet with me today and discuss your fund and your firm. And thanks very much to C WorldWide for being part of the Pathways family.
Bo Knudson:                     
Thank you very much for inviting me.
Tyler Wiley:                      
Thank you.
Bo Knudson:                     
It's a pleasure.
Close

Ross Cameron, B.Comm., Head of Japan Office, Portfolio Manager, Senior Analyst
Northcape Capital – Pier 21 Asset Management

Ross Cameron:                 
Hi. I'm Ross Cameron of Northcape Capital. Welcome to my city, Tokyo. This is Northcape. We're pleased to be part of your fund shelf. I look forward to telling you who we are.
Tyler Wiley:                      
Hi Ross. Welcome to Toronto.
Ross Cameron:                 
What a gorgeous day. Beautiful.
Tyler Wiley:                      
It sure is. Let's talk a little bit about institutional investing. Why is it important to be an institutional investor?
Ross Cameron:                 
All of our clients are institutional. We're not in the retail space. But you have to step back and look at the origins of our fund. We want the kind of fund that we would invest in ourselves, so that's way we have a very, very high conviction approach. We're looking for the very, very best ideas in emerging markets. We're low turnover. We're not traders. We really see ourselves as owners of the companies we're investing in.
Tyler Wiley:                      
Great. So, maybe walk us through a little bit of the investment process and include an example.
Ross Cameron:                 
Okay. So I'm going to do that in reverse order, and you'll see why. So a company that we really like is LG Household & Health Care. It's a Korean company that really ... most of its earnings come from cosmetics. This is something where we identified a very attractive industry dynamic, spent a lot of time looking at that and then went through the various players in the industry before we found the right way to play this.
Ross Cameron:                 
So the theme that we discovered was that one of the most attractive themes in global consumer is Chinese demand for cosmetics. All the biggest markets in a per capita sense for cosmetics are in Asia. The biggest users of cosmetics, Japan, Korea, Taiwan, Hong Kong. And then you have this standout which is China with very, very low per capita consumption. Anything like that where you see a kind of idiosyncratic outcome or something that looks unusual, that's interesting to us.
Ross Cameron:                 
We're looking for these kind of, hold on, is this an opportunity? So we looked into this. Why is it that cosmetics usage in China is so low relative to the biggest cosmetics users in the world. It's history. It's not about GDP per capita. It's about basically, the early decades of the Communist Party. Under Mao, any use of cosmetics was frowned upon. This was just not in the keeping of Maoist philosophy.
Ross Cameron:                 
What's happened now is China's becoming a modern, industrialized country and so you're seeing this very, very rapid growth of cosmetics consumption in China. It's growing at 30% per annum. So we originally looked at this, maybe there's a retail opportunity here. In the end, what we discovered is the most attractive area to play this is very, very high-end cosmetics and that is because Chinese consumers still remain very hesitant to buy luxury products that are made in China.
Ross Cameron:                 
If you're looking at pharmaceuticals, stuff that you're putting on your skin, people are prepared to pay more money. And they will pay more money for a foreign player. So in the mass-market cosmetics there's a lot of Chinese players. It's a blood bath. Chinese players, as we've seen in so many industries, very, very competitive. Industry returns come down. In the high-end the Chinese can't compete so it's dominated by a couple of French players and this Korean player.
Ross Cameron:                 
This Korean player own Who which is the number one luxury brand in China. Xi Jinping's wife uses it. It's still growing. In the fourth quarter last year it grew up 40% per annum. The brand, it's a $2 billion brand. Very, very high returns on capital. It's been a wonderful, wonderful investment for us. Now the second part in the process which is really important as well is sovereign risk.
Ross Cameron:                 
Now there's 23 countries in emerging markets. The difference between countries in any given year, dramatic. So we have an innovative approach to this. I haven't seen anything else on the market like it. We're very, very proud of it where we spend probably half our time looking at sovereign risk, as we call it with the end result of coming up with a different discount rate, a proprietary discount rate for every country in emerging markets.
Ross Cameron:                 
So if, for argument's sake, let's say we have the same company in Korea and Russia. In Korea we're going to be, in our model, discounting the cashflow is at 10%. In Russia it's going to be 25%. So a Russian ... Russia may to a stock-picker look cheap on nine times earnings. On our model we say, no, it should be on three times earnings given the sovereign risk here.
Ross Cameron:                 
And the big manifestation of sovereign risk obviously is currency. I mean if you're in the wrong market you might do well on the stock but you lose all your money on the currency.
Tyler Wiley:                      
Great. Well thanks a lot for coming in to talk to me today and thanks very much to Northcape for being a part of the Pathways Funds.
Ross Cameron:                 
It's, we're very happy to be a partner. Thank you very much.

Here are some more materials to help you get familiar with the Canada Life Pathways segregated funds.

*GWL Investment Management is a division of GLC Asset Management Group Ltd.
**C WorldWide is available through Pier 21 Asset Management
***Northcape is available through Pier 21 Asset Management

Pathways funds are available in:

  • Standard series
  • Partner series
  • Preferred series 1 and 2
  • Preferred partner series

With Pathways funds, you can select one of two guarantee levels:

  • 75/75 guarantee
  • 75/100 guarantee