CGI's NAV Lags Benchmark as Leverage Increases
Event summary
- CGI's NAV per share at September 30, 2026 was $86.20, with YTD and 12-month NAV returns of 8.0% and 8.6%, respectively, underperforming the S&P/TSX Composite Index's 13.0% and 20.0% returns.
- Leverage increased to 12.5% of net assets as of September 30, 2026, up from 11.9% at the end of 2025.
- CGI's share price returned 11.7% YTD and 14.2% over 12 months, with dividends reinvested.
- Top 10 investments comprised 38.6% of the portfolio, led by Celestica Inc. (5.5%) and NVIDIA Corporation (5.4%).
The big picture
CGI's strategic use of leverage aims to boost returns, but its recent underperformance against the benchmark raises questions about the effectiveness of its investment strategy. The company's sector allocations reflect a diversified approach, with significant exposure to industrials, technology, and materials. The broader market context suggests that CGI's ability to navigate sector-specific volatility will be critical in sustaining long-term returns.
What we're watching
- Performance Gap
- How CGI's underperformance relative to the S&P/TSX Composite Index will impact investor confidence and future capital inflows.
- Leverage Impact
- Whether the increased leverage will enhance returns for common shareholders or introduce higher risk.
- Sector Allocation
- The pace at which CGI may rebalance its sector weightings to align with shifting market dynamics.