M arch 31, 2020 Prosperously navigating unexpected events with - PowerPoint PPT Presentation

M arch 31, 2020

Prosperously navigating unexpected events with great skill and agility 2

AGENDA Who We Are Investment Methodology Performance by sectors Risk Management Current Opportunity and Investment pipeline Performance Summary DISCLAIMER: The information and opinions expressed herein are current as of this document date and Black Swan Dexteritas Inc. assumes no obligation to provide updates or advise on further developments. Any reference should not be considered as investment advice or a recommendation to buy or sell nor should it be considered as any indication of the portfolio of any Black Swan Dexteritas investment fund or how it will be invested. Commissions, trailing commissions, management fees and expenses may all be associated with fund investments. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. 3

WHO WE ARE PORTFOLIO MANAGEMENT EXPERIENCE TECHNOLOGY EXPERTISE • Unique insight • Portfolio Manager with 30 years of from entrepreneurs leading portfolio management experience international tech development across various asset classes at based on needs creation asset management companies (LGT, • Advisory Committee of tech leaders BLACK SWAN TAL, CIBC Asset Management), and who determine the global adoption a pension (British Petroleum) DEXTERITAS and success of new technologies ( “ BSD ” ) • Exceptional research team with a • Representation in all BSD-invested wide breadth of knowledge in tech sectors and sub-sectors, for research, finance, and engineering unrivalled expertise • Intense due diligence process for our stock selection process • Unique risk management overlay to minimize drawdowns and volatility 4

INVESTMENT METHODOLOGY IDEATION • BSD Investment Advisory Committee: seek out global growth themes and trends to overweight and underweight various subsectors PUBLIC COMPANIES • Experienced investment team sourcing trade ideas and discussing vital macro economical forces in play PORTFOLIO CONSTRUCTION • Draw on sector experiences from members of the committee and discuss emerging technology from the private and public space • Deep dive into industry verticals to identify beneficiaries in other primary, secondary, and tertiary markets IDEATION SECTOR ASSESSMENT • Life Cycle: Sectors in introduction and growth stages with high Total Addressable Market (TAM) • Competition: High barrier of entry with differentiated products and services within the sector SECTOR ASSESSMENT COMPANY ANALYSIS • Business Model: Public ccompanies with high recurring revenue, easily able to leverage network effects, strong negotiating power with suppliers and customers, and strong corporate governance • Size: Target small (500M+) to large cap public companies with established track record of executing the business. COMPANY ANALYSIS • Growth: Public companies with high and/or consistent revenue growth • Valuation: Determine if opportunities exist based on our fair value expectation of stocks versus current stock prices PORTFOLIO CONSTRUCTION • Weightings: Determine % of portfolio allocated to holdings based on risk-reward expectations • Diversification: Well-diversified across 35 to 40 holdings to maximize risk-adjusted returns • Hedging: Utilize derivatives and fixed income products to minimize drawdowns and generate alpha 5

TOP 10 STRATEGIC TECH TRENDS FOR 2020-2021 6

INVESTMENT METHODOLOGY DIVERSIFICATION As of March 31, 2020 PORTFOLIO BY MARKET CAP PORTFOLIO BY TECH SUBSECTOR Internet Software 13.79% Semiconductors 13.42% Communication Equipment 8.90% Fintech 7.13% Consumer Services 4.05% Over $10B $5B to $10B 91.0% Cyber Security 3.95% 5.0% Automation 3.69% Technology Real Estate 3.63% Under $5B 4.0% Consumer Electronics 1.99% BSD is well-diversified across 10 technology subsectors across 30 to 35 holdings with minimal correlation. BSD seeks out high potential technology sectors with promising unit sales projections and revenue projections and minimizes exposure to low potential sectors 7

RISK MANAGEMENT HEDGING OVERLAY HEDGING STRATEGY The goal of the hedging strategy is threefold: 1. Minimize the portfolio’s drawdown 2. Lessen the portfolio’s volatility 3. Generate alpha HEDGING TACTICAL PROCESS There are 3 tactical steps in the execution of the hedging process: 1. The neutral market position is set at 20% of the stock portfolio, ex-cash 2. The hedging position will deviate from the neutral market position to underweight or overweight, based on macro fundamental, technical, and capital flow factors 3. The combination of various futures instruments ( for example, S&P 500 futures, Nasdaq 100 futures, and Russell 2000 futures) is determined by a proprietary hedging model HEDGING P&L IMPACT The hedging strategy is an “insurance” policy in anticipation of an adverse market event The hedging tactical process limits drawdowns, and potentially generates alpha 8

RISK MANAGEMENT CASE STUDY 2020 CORRECTION When we see certain signs of market 15.00% deterioration, we increase our hedging BSD Global Tech positions. S&P/TSX Composite Blended Nasdaq/Russell 2000 5.00% 31-Dec-19 2-Jan-20 4-Jan-20 6-Jan-20 8-Jan-20 10-Jan-20 12-Jan-20 14-Jan-20 16-Jan-20 18-Jan-20 20-Jan-20 22-Jan-20 24-Jan-20 26-Jan-20 28-Jan-20 30-Jan-20 1-Feb-20 3-Feb-20 5-Feb-20 7-Feb-20 9-Feb-20 11-Feb-20 13-Feb-20 15-Feb-20 17-Feb-20 19-Feb-20 21-Feb-20 23-Feb-20 25-Feb-20 27-Feb-20 29-Feb-20 2-Mar-20 4-Mar-20 6-Mar-20 8-Mar-20 10-Mar-20 12-Mar-20 14-Mar-20 16-Mar-20 18-Mar-20 20-Mar-20 22-Mar-20 24-Mar-20 26-Mar-20 -5.00% -15.00% -25.00% -35.00% Our prudent risk management system allows us to navigate market corrections and black swan events with lower drawdowns and higher returns *BSD ’ s Global Technology Hedge Fund benchmark is a 50/50 Nasdaq/Russell and any references to other indices are made for information purposes only; including the S&P/TSX Composite Index (Canada ’ s primary exchange) which is the 9th largest stock exchange in the world, based on the market capitalization. It is the equivalent of the S&P 500 market index in the USA. Since the S&P/TSX is comprised of Canada's largest and most prominent companies, it is often used as a barometer for the health of the Canadian economy. Used here, the S&P/TSX has two primary functions: to provide an easily understood snapshot of how Canada's public companies are performing, and to provide a benchmark against which fund managers can compare their results to assess their success. 9

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE • DIGITALIZATION & ELECTRIFICATION The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD 1.5 trillion market in 2030 • 5G DEPLOYMENT The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at the Mobile World Congress • DIGITAL TWINS T he digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023 • BIG DATA Worldwide Big Data market revenues for software and services are projected to increase from $42B in 2018 to $103B in 2027, attaining a CAGR of 10.48%. • AUTOMATION & ROBOTIZATION After growing at a compound rate of 17 per cent a year, the robot market will be worth $135bn by 2019, according to IDC • GAMING Gaming market to grow at a CAGR of +11% toward 2021 to reach $180.1 billion 10 Source: Statista, Gartner, Ericson, Newzoo

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE DIGITALIZATION & ELECTRIFICATION  Entire industries are changing with and through digitalization, while car drivers are demanding even more from their vehicles. In addition to vehicle dynamics and consumption, the perceived intelligence, comfort, and convenience of the car also play a significant role.  We are convinced that electromobility in its many different forms will be an essential component of future mobility.  The automotive revenue pool will grow and diversify with new services potentially becoming a ~USD 1.5 trillion market in 2030. 11

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE 5G  5G networks are the next generation of mobile internet connectivity, offering faster speeds and more reliable connections on smartphones and other devices than ever before.  The 5G market will grow to $1.23 trillion by 2026, according to a new report by Ericsson announced at the Mobile World Congress  Verizon CEO: 5G is a lot closer than people think. 12

CURRENT OPPORTUNITIES AND INVESTMENT PIPLINE DIGITAL TWINS  A digital twin is a virtual representation of a physical object or system across its lifecycle, using real- time data to enable understanding, learning and reasoning.  Digital twins integrate artificial intelligence, machine learning and software analytics with data to create living digital simulation models that update and change as their physical counterparts change.  The digital twin market is expected to grow at a CAGR of 37.87%, to reach USD 15.66 Billion by 2023. 13