Welcome To Scivest
SciVest brings together both science and investing – in our name and in our portfolio management. Founded by Dr. John J. Schmitz, a Ph.D. in Finance who has a bias towards science-based research and methods, SciVest uses sophisticated quantitative analysis and extensive fundamental analysis to create investment portfolios for our clients. “Sci-Vest, where Science meets Investing.” Originally founded in 1999, we have been managing global equity and equity derivative portfolios for almost two decades.
Investment Beliefs and Philosophies
Decades of academic and practitioner research, as well as live portfolio management experience, has led SciVest to the following investment management beliefs and philosophies:
- Portfolio return compounding over long periods of time is the magic ingredient for significantly increasing future wealth.
- Excessive volatility/risk impedes long-term wealth accumulation (i.e., lowers compounded returns).
- Financial markets are inefficient (i.e., assets may not reflect fundamental fair value), sometimes egregiously inefficient, in the short to medium-term. However, financial markets become efficient (i.e., assets reflect fundamental fair value) in the long-term.
- Despite being inefficient, financial markets are incredibly difficult to consistently “beat” on an after-cost, risk-adjusted basis over any time horizon.
- The best chance to outperform in the long-term comes from overweighting assets which are undervalued (i.e., inexpensive relative income and risk) and underweighting assets which are overvalued (i.e., expensive relative to income and risk).
- Portfolio diversification is by far the most important risk management and mitigation tool available to investors. Furthermore, good portfolio diversification can be achieved with minimal cost.
- The magnitude of investment management fees and expenses is the most significant and predictable differentiator of relative long-term investment performance. As a result, investment management fees and expenses must be minimized, carefully monitored and controlled to ensure the best long-term performance outcome.
- The long-term strategic asset allocation (i.e., asset mix) decision is the most important factor in determining investment return and risk in the long-term (not individual security decisions).
- Short-term trading and tactical asset allocation (market timing) is difficult, risky and costly, and thus cannot be expected to consistently add value in the long-term.
- After the long-term strategic asset allocation decision, for properly diversified portfolios, exposures to various investment styles and strategies is the next most important determinant of investment return and risk in the long-term (not individual security decisions).
- The short to medium-term efficacy of all investment styles and strategies can vary significantly through time (i.e., go in and out of favour). This, however, does not necessarily mean that their efficacy in the long-term is jeopardized.
- Emotionless, rational, disciplined and consistent application of proven, theoretically sound investment strategies is key to the long-term investment success of those investment strategies.
- Regular portfolio rebalancing helps to maintain an appropriate level of portfolio risk and will likely also enhance long-term portfolio returns.
- In the long-term, inflation is the greatest enemy of investors requiring income generated from investment portfolios to provide for their living needs.
- The majority of investors are too emotional, too myopic and too focused on the short-term. These instincts damage long-term compounded returns and wealth accumulation, and thus must be fought and ideally overcome.
Chief Investment Officer – John J. Schmitz, Ph.D., CFA
John has been professionally managing global equity and equity derivative investment portfolios for over 20 years, and prior to that he acted as a consultant to investment management firms and funds. John has managed many different types of investment portfolios ranging from long-only mutual funds and pooled fund trusts to market neutral equity, net short equity and long-short equity hedge funds. He has also managed portable alpha strategies, as well as several arbitrage-based and event driven hedge strategies. John’s expertise is the portfolio management of global equities and global equity derivatives using both highly sophisticated quantitative models, as well as traditional fundamental methods. John’s current professional focus is his firm’s global, common equity, fundamental, growth of dividends investment strategy which is often implemented with an options writing income generating overlay. John is also considered an expert in asset allocation and portfolio formation.
John has received several top money manager awards including the global GAIM awards for Best Early and Best Mid Stage Market Neutral Equity Manager in the World (2003), as well as a couple of Canadian Investment Awards for the Best Relative Value Hedge Fund (2004). In addition, John was the top performing Global Equity fund manager in Canada for calendar 2016 (out of the 747 unique Global Equity funds tracked by Fundata).
John has held Senior Vice President level portfolio management positions at Financial Concept Group (a subsidiary of Midland Walwyn Inc., and later Merrill Lynch Canada) and Maxxum Fund Management (later Mackenzie Financial, each subsidiaries of Investors Group). However, John is an entrepreneur at heart and since 2002 he has been President and CEO of SciVest Capital Management Inc., a London, Ontario, based registered portfolio management firm which he founded and holds majority ownership. At SciVest and its affiliates, John has managed teams of professionals and launched numerous investment products. While John has extensive Canadian experience, he also has offshore experience having previously been professionally based in The Bahamas for nine years overseeing Bahamas and Cayman Islands based investment entities, as well as the Canadian operations.
In addition to his professional duties, John is currently an Associate Professor of Finance (part-time) at the Richard Ivey School of Business at the University of Western Ontario teaching MBA-level Portfolio Management in one of the top MBA programs in the World. Previously, he taught a senior-level Investments course for a number of years at the Rotman School of Management at the University of Toronto. John has authored a number of refereed academic publications and practitioner articles, and has been a presenter at numerous academic and practitioner conferences and events. John is also currently a member of the Investment Committee at the London Community Foundation, one of Canada’s larger community foundations.
John holds a BESc (Mechanical Engineering), a BA (Economics) and a DHS (Honors Economics) from the University of Western Ontario, a MA (Economics) from the University of Toronto, and a PhD (Finance) from the Richard Ivey School of Business at the University of Western Ontario. He also holds the Chartered Financial Analyst (CFA) designation.