There are two steps to successfully allocating capital:

1. At the client level: understanding a client’s long-term financial objectives and risk profile and then allocating their capital across our core and focused strategies accordingly.
2. At the fund level: striving to exceed our risk-adjusted objectives by generating the greatest return for the least amount of risk - the optimal point on the risk/return frontier.

Core Strategies vs. Focused Strategies

What is consistent between our core and focused strategies is our underwriting discipline, CISSEMT– it determines what, when and why we buy a specific security.  The main difference between our two strategies is that in our core strategies we assume responsibility for actively managing the asset mix – meaning that we are not afraid to hold cash if it does not make sense to take on exposure to risky assets.  This contrasts with our focused strategies, which  clients can access for a specific investment strategy or asset class that has a distinct risk/return profile.  We believe our focused strategies to be a natural extension and deepening of our core strategies as they move further up the risk/return frontier.

Core Strategies:

• KJH Fixed Income Fund

  The investment objective of the KJH Fixed Income Fund is to provide stability of capital through investment in North American fixed income securities. The investment strategy and policy of the Fund is to have at least 70% of Fund assets invested in investment grade bonds or better, with a minimum of 30% in government bonds.

• KJH Capital Preservation Fund

  The investment objective of the KJH Capital Preservation Fund is to generate an equity-like rate of return over a full cycle through the ownership of common shares of Canadian and U.S. corporations and fixed income securities. The goal of the Fund is to produce a modest return, even in a negative equity market year. Up to 60% can be invested in equities that specifically meet our ‘CISSEMT’ framework, which is a bottom-up security-specific approach proprietary to KJ Harrison & Partners Inc. In addition, a minimum of 40% of the portfolio will be in fixed income securities. The purpose of the fixed income portfolio is to produce predictable income with modest interest rate and credit risk, as well as to reduce overall portfolio volatility. Such securities shall include cash and cash equivalents, government and corporate bonds. It is expected that 50% of the fixed income portfolio will consist of investment grade (BBB rated by S&P) or higher securities.

• KJH High Yield Fund The investment objective of the KJH High Yield Fund is to generate returns consistent with the long-term performance of equities indices, with half the volatility, by investing in North American high yield securities. The investment strategy and policy of the Fund is to have up to 100% of Fund assets invested in North American high yield securities.
• KJH Strategic Investors Fund

  The investment objective of the KJH Strategic Investors Fund is to generate long-term capital growth, predominantly through the ownership of common shares of Canadian and U.S. corporations. Specifically, the goal is to outperform the blended equity benchmark over a full cycle, with volatility no more than half of the blended equity benchmark. The investment strategy and policy of the Fund is to take a concentrated approach to investing, whereby approximately 15-20 positions will constitute 80% of the Fund’s investment portfolio. The Fund selects securities that specifically meet our “CISSEMT” framework, which is a bottom-up security-specific approach proprietary to KJ Harrison & Partners Inc.

Focused Strategies:

• KJH Sweet Sixteen Fund

  The investment objective of the KJH Sweet Sixteen Fund is to generate long-term capital growth, predominantly through the ownership of common shares of North American corporations. The Fund will be highly concentrated, whereby no more than 16 companies will constitute 100% of the Fund's investment portfolio. Specifically, the goal is to outperform the KJH Strategic Investors Fund over a full cycle. Volatility is expected to be commensurate with an undiversified equity portfolio. The Fund selects securities that specifically meet our ‘CISSEMT’ framework, which is a bottom-up security-specific approach proprietary to KJ Harrison & Partners Inc.

• KJH Small Companies Fund

  The investment objective of the KJH Small Companies Fund (the “Fund”) is to generate long-term capital growth, predominantly through the ownership of common shares of North American corporations. The portfolio will be invested in companies that have a market capitalization float of no more than $1B in Canada and $2B in the U.S. The Fund will hold no more than 50 positions. The Fund seeks to find companies that are undiscovered and under-followed but yet are considered important in their respective industries. The Fund selects securities that reflect our ‘CISSEMT’ investment philosophy, which is a bottom-up security-specific approach proprietary to KJ Harrison & Partners Inc.

• KJH Financial Franchises Fund

  The investment objective of the KJH Financial Franchises Fund is to generate long term capital growth, predominantly through the ownership of equity in publicly-traded Canadian and U.S. entities that are engaged in the financial services industry. The strategy of the Fund is to use the Manager’s proprietary ‘CISSEMT’ framework to select a focused portfolio of not more than 20 investment positions. The Fund may also invest in debt, debentures and preferred equity issued by financial services entities (including instruments convertible into common equity), sell positions short up to 20% of the equity value of the Fund, buy or write options and use derivatives (forwards and swaps) to hedge investment, credit or currency exposures.

• KJH Energy Partners Fund

  The investment objective of the KJH Energy Partners Fund is to generate capital growth, predominantly through the ownership of common shares of Canadian corporations engaged in a) exploration and development of oil and gas and b) providing services to such companies. The investment strategy and policy of the Fund is to choose investment positions appropriate to the manager’s assessment of cyclical conditions in the energy industry from time to time. Derivatives may be used to manage the Fund’s exposure to currency and/or commodity risks.