Purpose Best Ideas Fund January Commentary

Fund Commentary

The Fund seeks to provide shareholders with attractive long-term capital appreciation by investing in a high conviction portfolio of North American equities. The Fund invests in a portfolio of North American equities held by some of world’s most renowned investment managers.

The Fund was negative in January. The only positive sector was healthcare while the worst sectors were consumer discretionary, technology and financials. The best performing names were Valeant, Crown Castle and Apple. The worst performing names were Hertz, Micron and Fox A.

The portfolio continues to hedge USD currency exposure maintaining a net USD exposure at approximately 10% of the Fund’s NAV.

This month the CAD dollar plunged 8.7%. This had a material positive impact on PBI.B which benefitted from its unhedged USD exposure.

Market Commentary

Markets were volatile this month as central bank activity dominated most of the headlines. Deflation worries spurred the ECB to initiate a Euro 1.1 trillion stimulus package targeting the purchase of sovereign debt. The Bank of Canada shocked the market with a 25 bp rate cut citing recent weak economic data and concern over the negative effect of plummeting oil prices. The Swiss national bank roiled financial markets when it removed its long held peg versus the euro triggering a historic 20% move higher in the Swiss franc. This month European equity markets were the strongest performers on the back of the ECB action. U.S. markets ended down 3% and the S&P/TSX closed slightly positive. Commodities continued to experience weakness this month. The energy sell off extended lower as crude fell another 10%. Copper fell 13% to 5 year lows on declining demand and worse than expected economic data in China. Precious metals bucked the trend as gold rallied on safe haven flows. Currency markets were extremely volatile this month as central banks drove large moves. The dollar continued to see strength versus the Euro and other commodity currencies. Canada was the worst performing G10 currency falling 8.7% after the BOC’s surprise rate cut.

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