Oak Bay Capital was founded on the core belief of helping our clients navigate an increasingly complex market environment by focusing on risk management and superior stewardship of capital.
Our mission is to create value for clients by providing an effective investment strategy specifically designed to protect capital while delivering attractive returns over the long term. We are committed to upholding the highest standards of integrity and fiduciary duty, placing our clients’ interests first in all our actions.
Stewardship is the careful and responsible management of something entrusted to one's care, and it is the core founding principle at Oak Bay Capital. It defines our identity, directs our decision-making, and guides our conduct.
Integrity is the heart and soul of Oak Bay Capital’s culture. The firm is guided by the values of honesty, transparency, care and respect. Our clients place an enormous amount of trust in us, which we strive to honour and build upon through all our actions and communications. We are committed to continuous improvement and care deeply about the opinions and feedback we receive from our clients and colleagues.
Capital Preservation is the cornerstone of our investment philosophy. We believe that protecting against losses during market drawdowns has a magnified impact on long-term investment returns. We limit the downside risk to client portfolios by owning a diversified set of strong businesses and strategically implementing options-based portfolio protection. This approach is further complemented by a third component, Thematic Convexity, designed to add a tactical layer of protection for extreme market scenarios.
Professionalism involves high standards of ethical behavior, technical expertise, and a strong dedication to client service. Our commitment to professionalism is reflected in a culture of respect and collaboration with clients, colleagues and peers. We believe in upholding and advancing the profession through discipline, constant improvement, innovation, education and mentorship.
Canada has some of the highest mutual fund fees in the world.
While the large-scale adoption of ETFs in recent years has lowered overall fee levels, traditional industry players have continued to consolidate their competitive position by buying smaller brokerages and independent managers. As a result, a few established competitors control the bulk of investment vehicles available to Canadians.
According to a recent survey done by the research and consulting firm Accenture, 4 of 10 Canadian investors said they do not “get what they pay for” when using a traditional wealth advisor. This has led many individuals to take matters into their own hands. While some have had success, in large part attributable to the historic 2009-2019 bull market, we believe most individuals lack the time, resources, experience or interest to effectively manage their investments in an increasingly complex market environment. Our goal is to provide clients a compelling value proposition by offering a high-quality risk-managed solution at a competitive price.
Track record for individual investors is not encouraging. DALBAR, a leading financial services marketing research firm, released a study that showed from 1995 to 2015, the unmanaged S&P 500 index earned an average of 8.19% annually.
Over the same period, the average equity mutual fund investor earned a mere 4.67% annually. The difference was traced to behavioral biases, where emotional decision-making led to significant underperformance when compared to the benchmark.
The recent prolonged period of market stability, marked by historic levels of monetary stimulus and fiscal spending, has also led to a generalized complacency and unnecessary risk-taking. This has left many investors susceptible to investing mistakes known in behavioural finance as emotional biases or cognitive errors such as under-diversification, over-leverage, overconfidence, loss aversion, etc. These errors could lead to financial ruin during market turmoil and could be addressed through a systematic approach to portfolio management.
Our goal at Oak Bay Capital is to provide our clients an alternative to the status quo; a superior and more sophisticated approach to investing and risk management. We strongly believe in the CFA Institute’s commitment to the profession and to building investor confidence and trust through an industry-wide commitment to professionalism, integrity, and transparency.