Landry Investment Management offers investment strategies that are unique and top performing for Canadian, US and Global markets by harnessing the strong potential of price momentum and the long term advantages of value investing.

Landry Investment Management’s role is to efficiently extract from the markets the excess return from both those factors.

Advantage of the momentum factor

The persistence of price return – or momentum – is one of the most powerful and best-documented market phenomenon on the stock market. A group of securities whose price has increased the most over the past 12 months will continue to outperform over the following 12 months. Therefore, a systematic quantitative strategy based on momentum can generate long-term returns that significantly outperform the market.

The following table shows excess returns that can be obtained with a momentum approach:

Simulation of the Canadian momentum strategy (1996-2013)
Return Standard deviation Sharpe ratio
Momentum strategy 19.8% 20.7% 0.96
S&P/TSX Composite 9.4% 15.7% 0.60
Added value 10.4% 5.0% 0.36

Simulation before fees. The standard deviation measures volatility. The Sharpe ratio measures risk-adjusted performance. Sources: S&P Capital IQ and Landry Investment Management

Advantage of the value factor

It has been shown that securities whose price is very low compared to the fundamental value of the company generate superior long-term returns. It is not the long-term performance of the company that is important but the purchase price of the security relative to its value at a given point in time. Therefore, a portfolio of carefully selected value securities will generate superior long-term returns while being much more stable than the general market.

The following table shows excess returns that can be obtained with a value approach:

Simulation of the Canadian value strategy (1996-2013)
Return Standard deviation Sharpe ratio
Value strategy 18.8% 15.4% 1.22
S&P/TSX Composite 9.4% 15.7% 0.60
Added value 9.4% -0.3% 0.62

Simulation before fees. The standard deviation measures volatility. The Sharpe ratio measures risk-adjusted performance. Sources: S&P Capital IQ and Landry Investment Management

Value and Momentum (VALMO)

Value and momentum factors don’t provide higher returns at the same time. In other words, the correlation between the two is usually very low and sometimes negative. A portfolio consisting of two factors (VALMO) provide not only higher returns but will also be more stable than the market in general because of the low correlation between the two factors. The VALMO combination works especially well at two crucial moments, at the beginning and at the end of a bull market.

The following tables show how the VALMO combination behaved during two market turnovers:

Simulation of Canadian strategies over 36 months (1998-2000)
Return Standard deviation Sharpe ratio
Momentum strategy 24.3% 30.3% 0.80
Value strategy 14.2% 16.5% 0.86
VALMO strategy 19.2% 21.1% 0.91
Simulation of Canadian strategies over 36 months (2007-2009)
Return Standard deviation Sharpe ratio
Momentum strategy 8.2% 25.5% 0.32
Value strategy 12.5% 22.8% 0.55
VALMO strategy 10.4% 22.3% 0.47

Simulation before fees. The standard deviation measures volatility. The Sharpe ratio measures risk-adjusted performance. Sources: S&P Capital IQ and Landry Investment Management

The following graph shows information on both factors and on the VALMO combination:

Proven methodology

For almost 15 years, by drawing on academic research as well as performing their own research, Jean-Luc Landry and his team have been developing a quantitative methodology that exploits the momentum and value factors for the portfolio management of Canadian, US and Global equities.

Advantages of VALMO portfolios: 

  • Diversification
  • Resilience to declines
  • Outperformance on the long term

Canadian and US Equity

Before founding his firm in 2002, Jean-Luc Landry managed a very well performing fund using only the momentum factor for stock selection. Following the founding of his firm he devoted several months to improve its techniques in the selection of Canadian equities and developed a model for U.S. equities. The purpose of the improvements is to reduce the volatility of returns by ensuring that the portfolio’s positions better stick to the trend of market momentum while increasing portfolio diversification.As a result, the portfolios are rebalanced at least once a month since the beginning of the Canadian Equity Fund operations. Many other improvements were added over the years that followed. A few years later, the research team became interested in the influence of the value factor on portfolio performance and this led the firm to introduce value type securities in every fund managed by Landry Investment Management in 2010.Benoit Brillon joined the firm in 2012 as Chief Investment Officer to add a macro-economic dimension and a fundamental analysis dimension in the management of the funds. Here is the evolution of the Canadian Model: EvoEn

Global Equity

The momentum factor is powerful in several European countries and in Australia while in Japan the value factor is more powerful. A value-momentum (VALMO) portfolio that invests in these countries thus offers a good combination of excess return and stability.

Adaptive Value

The adaptive value style is an investment style that combines a rigorous bottom-up fundamental value approach and a strong understanding of the links between business cycles and stock market returns. This style respects the core initial characteristics of value investing. Value investing is a well-documented time tested approach for investing. This also includes in-depth quantitative and fundamental analysis of companies focusing on those that have the best mid-term to long term capital appreciation potential. The style is complemented by a proprietary quantitative top-down process that provides a systematic and methodical analysis of the global economy.  This combination of empirical and quantitative research allows us to produce quality forecasts of the economy.