Bristol Gate Capital Partners Inc.
45 St Clair Avenue West Suite 601
Toronto, Ontario M4V 1K9

Investment Commentary March 2015

Report to Investors

Concerns regarding earnings, valuation and quixotically the timing and extent of Federal Reserve rate action all conspired to hold the S&P 500 in check for the first quarter. Overseas markets did better, especially in local currencies. Quantitative easing has gone global. Fixed income markets also outperformed reflecting the concerns about economic growth. The S&P 500 has been trading sideways now for four months, a mini correction in time and preferable to the alternative. US corporations continue to set records in their return of cash to shareholders by way of dividends and share repurchase.

Our portfolio stocks reported 4th quarter earnings up 22% on a year on year basis. Revenue growth was 9%. Both measures well exceeded the broad market.

At Bristol Gate, we remain rooted to our discipline of owning stocks with exceptional dividend growth potential and selling those stocks which either fail or that we believe will fail to meet our expectations. As such, for much of the first quarter, the Fund owned 19 stocks and 3 stock units or about 14% cash.

The performance of the portfolio against the Index and other selected asset classes for the first quarter, 2015 is shown in the table below:


 Gross Returns In USD In CAD EUR
BG US Equity 4.10% 13.70%
S&P 500 Index 1.00% 10.20%
SMP/TSX Composite Index -6.03% 2.60%
DAX 7.60% 17.48% 22.00%
Long-term Canadian Bond -2.57% 6.38%

The following chart reports the consistent valuations using Price to Earnings ratios of the portfolio against the market for the past five years.


Refer to important disclosures below.

We are pleased with our first quarter performance. After completing our semi-annual portfolio review, we are fully invested. About 80% of portfolio companies’ revenues are generated in the US. The portfolio remains ‘overweight’ the US consumer.

Michael McNeil joined us in February as Chief Operating Officer and Chief Compliance Officer. Mike is a Chartered Professional Accountant (CPA, CGA) and holds an MBA from Dalhousie University. His experience as a senior operations executive with RBC and several major investment firms adds an important dimension to our firm’s capability.

We thank you for your trust in us and welcome your enquiries at your convenience. You might also wish to look at our web-site [] which has added content about our investment approach.


Richard Hamm
Chief Executive OfficerRichard
Peter Simmie
Chief Investment OfficerPeter

Important Disclosures

Gross returns in this report refer to Bristol Gate’s US Equity Strategy. No allowance has been made for custodial costs, taxes, operating costs, management and performance fees, which will reduce performance. Past performance is not indicative of future results.

The US Equity Strategy consists of equities of publicly traded dividend paying US companies. The Bristol Gate US Equity Fund LP, another fund and several institutional accounts are included in this composite, and are managed by Bristol Gate.

The S&P500 Total Return Index measures the performance of the broad US equity market, including dividend re-investment, in US dollars. The S&P/TSX Composite measures the total performance of 248 stocks actively traded on Canadian markets. The Deutscher Aktienindex [DAX] reports the total return in Euros of thirty selected German stocks trading in Frankfurt. The Scotiabank Canadian Bond Index reports returns in Canadian dollars from the universe of long duration bonds. These indexes are provided for information only and comparisons to each index has limitations.

This Report is for information purposes and should not be construed under any circumstances as a public offering of securities in any jurisdiction in which an offer or solicitation is not authorized, Prospective investors in Bristol Gate’s managed funds should rely solely on the fund’s offering documents, which outline the risk factors associated with a decision to invest. No representations or warranties of any kind are intended or should be inferred with respect to the economic return or the tax implications of any investment in a Bristol Gate fund.

Bristol Gate claims compliance with the Global Investment Performance Standards [GIPS®]. To receive a list of composite descriptions and/or a presentation that complies with the GIPS® standards, please contact us at