CGI's NAV Lags Benchmark Despite Strong Share Price Gains
Event summary
- CGI's NAV per share at August 31, 2026 was $88.50, with YTD and 12-month NAV returns of 10.9% and 17.0%, respectively, trailing the S&P/TSX Composite Index's 16.0% and 29.9% returns.
- Leverage increased slightly to 12.2% of net assets, up from 11.9% at year-end 2025 but down from 12.5% a year prior.
- Share price returns outperformed NAV, with YTD and 12-month gains of 15.1% and 29.2%, respectively.
- Top 10 holdings comprised 37.6% of the portfolio, with Industrials (20.3%), IT (18.7%), and Materials (18.4%) as the largest sector exposures.
The big picture
CGI's latest update highlights a strategic tension between strong share price momentum and lagging NAV performance against a robust benchmark. The company's leveraging strategy remains a key differentiator, though its slight increase in leverage may draw scrutiny amid broader market volatility. With significant exposure to cyclical sectors like Industrials and Materials, CGI's portfolio positioning reflects both opportunities and risks in the current economic environment.
What we're watching
- Performance Disconnect
- How CGI will address the divergence between share price gains and NAV underperformance relative to the benchmark.
- Leverage Strategy
- Whether CGI's modest increase in leverage will continue to enhance returns or introduce additional risk.
- Sector Concentration
- The pace at which CGI may rebalance its top-heavy sector exposures, particularly in Industrials and IT.