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As COVID-19 spread rapidly across the globe in early 2020 and lockdowns became commonplace, Canadians who raised money for a living – and those who invested it in their chosen profession – shared a sense of impending doom.

With millions suddenly thrown out of work and business closings climbing by the day, the common perception was that charitable donations would collapse. Meanwhile, the historic plunge in stock markets – across nearly all sectors and geographies – promised to deliver a sea of red in portfolios that would rival the worst ever seen.

It didn’t quite turn out that way. While overall charitable giving in 2020 is projected to have declined 10 per cent, online giving has soared to record levels, according to Canadahelps.org. Meanwhile, despite a few harrowing moments in the early days of the pandemic, the S&P 500 – the world’s foremost benchmark stock index – surprised nearly everyone in generating a total return of more than 18 per cent.

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The organizers of the annual Holland Bloorview Investor Challenge and their participants were left navigating the troubled waters of 2020. Since 2015, three veteran investors are chosen each year to face off to help raise money for the Holland Bloorview Kids Rehabilitation Hospital in Toronto.

While the contest normally runs a full calendar year with the same three fund managers, it was extended by an additional 12 months. As usual, each of the fund managers started with $25,000 donated by their respective firms. This time around, all capital and investment gains they accumulate over two years, up until the end of 2021, will go to the hospital.

Despite all the challenges presented by COVID-19 – including the need to switch to a virtual presentation of its annual gala – the Holland Bloorview Foundation raised a record $14.3-million in its fiscal year ended March, 2021. “So many of our donors have stepped up to help in many ways we thought unimaginable,” said Ashley Cruz, a spokeswoman for the hospital.

The foundation is hoping to keep the momentum going, and the Investor Challenge is part of those efforts, with the focus on raising awareness. “Although there has been some friendly competition historically, it is more about increasing the cumulative total of all the managers, to share the combined success of their fundraising for the campaign,” Donna Inch, the foundation’s chief financial officer, said in a statement.

Donations of cash or securities can be made to each manager’s Investor Challenge fund at hollandbloorview.ca/investorchallenge.

Here’s how each manager is faring so far, and what their best tip is for investors right now.

Sean McNulty, principal and co-founder at XIB Financial Inc.

The fund: Mr. McNulty’s XIB Fund has been the clear frontrunner for returns so far, thanks in part to its focus on equities. Since January, 2020, the hedge fund has returned 242 per cent to the end of this past June. Its mandate allows for a wide range of investments to capitalize on stock inefficiencies along with event-driven opportunities as they come up. For instance, it established long positions in consumer staples and technology stocks while shorting bricks-and-mortar retailers in early 2020, and reversed this positioning as the pandemic wore on. It also participated in new issue financings, including initial public offerings, which have had a particularly hot run over the past year.

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Best tip: “A major theme of the past 18 months has been the retail investment community playing a much more impactful role in the capital markets. The best tip I can offer in this MEME stock era is to recognize that fear of missing out and momentum are very real and can often significantly influence decision making for investors. Completely ignoring this social media-driven retail investor revolution is a mistake that many investors have made. So I won’t tell you not to try and pick your spots and surf this wave if you feel so inclined, but I will tell you to invest within your means and to remember that every wave eventually breaks.”

Paul Marcogliese, fixed income portfolio manager, CI Global Asset Management

The fund: Mr. Marcogliese’s Cambridge Bond Fund (renamed the CI Canadian Core Plus Bond Fund effective July 29) has returned 8 per cent over the past 18 months for its F Class series. Like most fixed income funds, the first quarter of this year saw a drop in net asset values as bond yields spiked and prices fell amid fears of inflation. But since January, 2020, the mutual fund has outperformed its benchmark, the FTSE Canada Universe Bond Index, by more than 200 basis points based on annualized returns. The fund was able to enhance returns by making investments in foreign bonds, high yield bonds and preferred shares that were not included in the benchmark.

Best tip: “Don’t lose sight of the possible risks in financial markets and continue to understand your personal risk tolerance. The tremendous appreciation in risk assets over the last 15 months, along with the perceived low return possibilities in safer assets, has caused more and more people to increase risk in their portfolio. Strive to participate in strong markets, but remember a portfolio balancing possible risks protects your wealth over the long term.”

Randy Steuart, partner, investments, Ewing Morris Investment Partners Ltd.

The fund: Mr. Steuart’s Ewing Morris Flexible Fixed Income Fund returned 9 per cent since Jan. 1, 2020, to the end of this past June, beating its benchmarks, the iShares U.S. High Yield Bond Index ETF (CAD-Hedged) and the iShares Core Canadian Corporate Bond Index ETF, both of which gained just over 5 per cent. The fund has a focus on high yield bonds, but also owns other securities including convertible bonds, preferred shares and investment grade bonds. In 2021, returns have been bolstered by an investment in the preferred shares of Shaw Communications on the back of its merger announcement with Rogers, according to Mr. Steuart.

Best tip: “My favourite investment tip came from fantastic conversation I had on March 19 of last year: ‘You gotta be buying when you’re scared stiff.’ I’ve cleansed this tip of its many expletives, which gave it a real punch. I like it because it doesn’t make an assumption that you’ll find yourself a temple of serenity and omnipotence in the midst of a market meltdown. It simply draws upon a more elegant line, often attributed to Churchill, that fear is a reaction; courage is a decision.”

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