Ten years ago, PICTON Investments set out to solve a growing problem. Canadian investors were being asked to navigate increasingly complex markets with portfolios built for a different era.
Traditional 60/40 models were struggling. Market shocks were becoming more frequent. And investors lacked access to strategies that could help stabilize returns when markets turned volatile. PICTON Investments saw an opportunity to bring its expertise in hedge-fund-style investing to a broader audience.
The firm had already built a reputation as a Canadian leader in alternative strategies, long before “liquid alts” became part of the everyday investment vocabulary. In 2015, PICTON Investments did something more ambitious. It launched three mutual funds designed to bring alternative thinking into a highly accessible structure.
Each of PICTON Global Equity Fund, PICTON Balanced Fund and PICTON Income Fund has now delivered strong performance over the past decade. They’ve also demonstrated that a mutual fund can do far more when built on a foundation of disciplined portfolio construction, hedging and risk-first thinking.
Giving everyday investors more resilience
From the beginning, the goal of the three mutual funds was simple: bring the strategies more commonly associated with hedge funds – shorting, hedging, tactical risk management and diversified sources of return – into the mutual fund world. That’s where most Canadians invest. The idea was to deliver smoother, more resilient experiences for investors.
While alternative strategies are more accessible today, the approach was unconventional at the time. Mutual funds rarely used shorting or options hedging. Few deliberately built strategies around alternative risk premia. But PICTON Investments believed Canadians deserved access to the same thinking that anchored many large institutional portfolios.
Today, with a 10-year track record behind them, these mutual funds have proven that alternative thinking isn’t a niche; it’s a competitive advantage.
PICTON Balanced Fund: a different way to build a balanced portfolio
The past decade hasn’t been kind to traditional balanced funds. Investors lived through an emerging-markets selloff, the 2018 interest rate-hike shock, the pandemic collapse, the post-pandemic inflation surge and, most recently, the sharp sell-off following the “Liberation Day” tariff announcements.
The correlation between stocks and bonds, once a reliable anchor, has broken down repeatedly. That has left many balanced portfolios exposed to the very risks they were designed to offset.
Throughout this turbulent decade, PICTON Balanced Fund stood out for its consistency. The fund has been a top-quartile performer in trailing return over the 10-year periods, and delivered strong long-term annualized returns relative to its peers in the Tactical Balanced Category Peers.
Source: Morningstar Canada, Trailing Returns as of Month End October 31, 2025.SUPPLIED
Instead of relying solely on traditional equities and bonds, the fund incorporates four elements:
- short equities and short fixed income positions;
- options hedging and tactical overlays;
- commodity and alternative exposures; and
- a risk-budgeting framework that aims to adapt to changing conditions.
This is balanced investing built for modern markets. “Our approach has always been to source returns with far less reliance on one asset class,” says Neil Simon portfolio manager and head of multi strategy at PICTON Investments, who co-manages the fund.
That philosophy helped the fund remain resilient across a decade of shocks and has provided access to tools that can help face an uncertain future.
PICTON Global Equity Fund: momentum, risk management and a smoother ride
Global equity investing has demanded agility during the past decade. Markets swung from collapse to mania to rotation, testing every major investment style. Momentum strategies fell out of favour, growth and value took turns leading, and concentration risk became a defining challenge.
PICTON Global Equity Fund navigated all of it with a distinctive approach: combine a disciplined momentum investing style with an expanded risk-management toolkit. The result has been global equity exposure with less volatility, and a focus on capital preservation during downturns.
Source: Morningstar Canada, Trailing Returns as of Month End October 31, 2025.SUPPLIED
One of the things that makes the PICTON Global Equity Fund different is how it uses hedges, tactical shorts and net-exposure adjustments. These are tools many global long-only equity mutual funds simply don’t employ.
That’s also one of the few momentum-driven global equity mutual funds remaining in Canada, offering a style that adapts rather than adheres to rigid growth or value labels.
The fund aims to deliver a smoother ride, helping investors stay invested through volatility rather than reacting emotionally during downturns.
“The most effective way to defend a portfolio is to have hedges in place before you need them,” says Michael Kuan, portfolio manager of the fund. That philosophy helped guide the strategy through some of the most dramatic global market swings in history.
PICTON Income Fund: high-yield returns with less risk
Source: Morningstar Canada, Trailing Returns as of Month End October 31, 2025.SUPPLIED
The secret is PICTON Investments’ alternative-inspired credit approach. It incorporates event-driven credit opportunities, active hedging and shorting to help manage duration and credit risk, and a broader toolkit than typically found in traditional fixed income mutual funds.
“We might be one of the only mutual funds in our category that hedges and shorts,” says portfolio manager Sam Acton.
That flexibility allowed the fund to navigate some of the most damaging periods in credit markets, while continuing to generate competitive returns. In a shrinking category, the fund has demonstrated what modern fixed-income investing can look like when built around risk-first principles.
A decade of proof, and a blueprint for the future
PICTON Investments set out to bring alternative thinking into the mutual fund world, and after 10 years the results have validated the approach.
This is a time when investors are questioning traditional models, fee structures and the limitations of rigid asset-class thinking. These three funds show what’s possible when portfolio construction evolves, and asset managers think more creatively about innovating in the mutual fund space.
Learn more about the 10-year track record of the PICTON Global Equity Fund, PICTON Balanced Fund and PICTON Income Fund.
DISCLAIMERS:
Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
Source: Morningstar Inc., Picton Mahoney Asset Management Research. From October 29 2015, to October 31, 2025.
The Canada Fund Tactical Balanced, Canada Fund Global Equity, and Canada Fund High Yield Fixed Income categories are recognized CIFSC fund categories.
The Morningstar Risk Adjusted Return (MRARs), commonly referred to as the Star Rating, relate the risk-adjusted performance of a fund to its peers with the same CIFSC Fund category for the period ended as noted and are subject to change monthly. Morningstar calculates ratings for categories with at least 5 funds. To determine a fund’s rating, the fund and its peer are ranked by their MRARs. If a fund scores in the top 10% of its category, it receives five stars (High); if it falls in the next 22.5% , it receives four stars (Above Average); the next 35% earns a fund three stars(Neutral or Average); those in the next 22.5% received two stars (Below Average); and the lowest 10% received one star (Low). The overall rating is a weighted average of the performance associated with the 3, 5 and 10 year ratings. The Morningstar ratings are class specific as performance and fee characteristics vary by each class. Quartile ranks group funds into four categories based on their relative performance within a peer group. These categories divide funds into four equal parts, or “quartiles,” making it easy to compare how well a fund has performed relative to others. For greater detail, see morningstar.ca. Morningstar Rating for Funds Methodology.
© 2025 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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