Purpose Best Ideas Fund December Commentary

Purpose Best Ideas Fund December Commentary

Fund Highlights

  • The story for large-cap growth stocks continues to dominate the market through December with the Russell 1000 Growth up +5.7% for the year vs Russell 1000 Value down -3.83%.
  • The Fund intrinsically supports this positive momentum style and although negative for the month, the Fund comfortably beat the broad market in December.
  • SunEdison (+59% return and 2.31% weight at month end) and Valeant (+13% return and 2.29% weight at month end) regained from previous pressure that the securities had experienced and contributed positively to Fund performance.
  • Position in Cheniere Energy was deterrent to performance as the stock declined -22% on perceived LNG demand pressured caused by falling oil prices.
  • With respect to the currency hedged shares, the Fund continued to hedge U.S. dollar currency exposure maintaining a net U.S. dollar exposure at approximately 7% of Fund’s NAV.

Market Commentary

Stocks and bonds ended lower in December to close out generally choppy performance for 2015.[Add sentence or 2 on 2015 market performance for U.S. equities, Canadian Equities, MSCI EAFE (local currency) and Canadian Fixed Income and oil and gold.] The main focus this month was on the FOMC decision. After another solid U.S. job number gave the green light for “lift off” the Fed delivered by hiking rates by 0.25% for the first time in a decade. The Fed went on to assuage concerns over the pace of future hikes by promising that the path would be gradual and data consistent. In Europe, Draghi underwhelmed on the extent of rate cuts and further QE measures which sparked a sharp rally in the Euro and European yields. In Asia, Chinese growth concerns resurfaced as the central bank allowed the yuan to weaken to its lowest level in over 4 years. In commodities, oil sold off further to new lows on the year after OPEC maintained its current production rate which disappointed potential expectations for a potential supply cut. Canada traded poorly on the back of this as the loonie and the S&P/TSX both sold off to end the year.

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