PenderFund Capital Management’s Global Small Mid Cap Equity Fund returned 1.4% in August 2026, narrowly beating the MSCI World SMID Cap Gross Total Return USD Index’s 1.3%. It was a photo finish, but a win still counts. The portfolio allocated 42.7% to US equities, 32.4% to Canadian equities, and 13.5% to international equities.
Meanwhile, investors had plenty to keep their blood pressure busy, including inflation readings, rising oil prices, and another round of central bank commentary. Hawkish remarks from Fed Chair Kevin Warsh heightened expectations for a September rate hike, yet US stocks rallied as strong earnings from major technology companies gave the AI trade fresh fuel. Apparently, enthusiasm for artificial intelligence can still compete with anxiety over actual interest rates.
Against that backdrop, PenderFund maintained its long-term approach, concentrating on factors within its control as market volatility and the approaching US midterm elections supplied the distractions. Readers can also explore the fund’s top five holdings for a closer look at its leading positions in 2026.
A copy of Pender Global Small Mid Cap Equity Fund’s August 2026 investor letter can be downloaded here.
In its third quarter 2026 investor letter, PenderFund mentioned Otis Worldwide Corporation (NYSE:OTIS). OTIS is an elevator and escalator company that manufactures, installs, maintains, repairs, and modernizes equipment used in residential buildings, commercial properties, and transportation infrastructure. Its business includes both new equipment sales and ongoing services for an installed maintenance portfolio of approximately 2.5 million units. That service operation provides continuing customer relationships beyond the initial equipment installation. On November 6, 2026, the stock closed at $78.96, a decrease of 0.67%, or $0.53, from the previous session. Its market capitalization was approximately $30.06 billion.
Here’s what PenderFund has to say about Otis Worldwide Corporation (NYSE:OTIS):
“Otis Worldwide Corp. (OTIS) – We added a new name to the fund in Otis, the world’s leading elevator and escalator manufacturer, installer, and servicer. Otis operates in two segments: New Equipment and Service with an installed base that is growing 3-4% per year. In our view the company should be able to grow FCF by 9% per year over the next five years on top of a 38% ROIC generated over the last decade. We believe Otis’s moat has also widened through its investment in technology, resulting in a stickier customer base. We saw an attractive opportunity to enter the name when the stock was trading at a historically low 7% 2027E FCF yield.”
Otis reported third-quarter 2026 results on October 28, announcing approximately $3.9 billion in net sales and 6% organic sales growth. Reported earnings per share increased 14% to $1.08, while adjusted earnings per share remained unchanged at $1.05. Management highlighted double-digit modernization growth and high-single-digit repair growth, with its Service operating margin improving to above 24%. The company pointed to investments in field capabilities, AI-enabled pricing, and cost control as supporting factors, underscoring the importance of maintaining and upgrading existing equipment alongside selling new elevators and escalators.
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Disclosure: No material interests to disclose. This article was originally published on Global Market Bulletin.
