James Telfser has been ramping up his fund’s exposure to equities in the past year, but you won’t find any Canadian banks among his firm’s holdings.
In fact, Telfser, a partner and portfolio manager with Aventine Management Group, says his firm has never had a position in any of Canada’s big banks. Aventine prefers non-bank financials like GoEasy (GSY.TO), an alternative lender that Telfser says provides exposure to Canadian consumers, without the recent concerns of oil and gas loans and provisions for credit losses.
“It looks like a lot of [those concerns are] done with,” Telfser told BNN. “But we see much better opportunities outside the banks to make 15 to 20 per cent versus the banks making five per cent.”
Telfser said Aventine prefers finding opportunities where other portfolio managers may not be looking, including material and cyclical plays like Lundin Mining (LUN.TO) and auto parts maker Linamar (LNR.TO).
“We’ve never had a position in one of the big banks. It’s not that we don’t like the big banks… but we’re trying to make money where other managers aren’t making money,” he said.
“That’s the whole goal of our fund is to make sure we hold names now that are going to be the names that large-cap managers are looking at down the road.”