Purpose Best Ideas Fund July 2016 Commentary

Fund Highlights

  • The Fund was positive in July with many names recovering from depressed valuations as the S&P500 marked new all-time highs.
  • The Fund benefitted from the recovery of cyclical sectors such as technology and discretionary and there were only two names which detracted from Fund performance, Kraft-Heinz and Walgreens Boots.
  • Although these top manager picks remain underwater for the year, the names have experiences a sharp recovery this month and are placed very well on the value spectrum to receive further upside.

Market Commentary
July saw a continuation of a post Brexit relief rally. Although the outcome for European growth was likely long term negative, short term flows outweighed those concerns as investors needed to put money to work. Equities rallied higher with the S&P making new all -time highs, while European markets recovered higher. With central banks keeping rates at exceptionally low levels, the hunt for yield was heightened as investment grade and high yield credit rallied. Commodities experienced weakness led by the energy complex. Crude prices sank over $10 on concerns of a supply glut. As a result, commodity cyclical currencies also saw weakness. Slack Canadian economic data and worries over a housing bubble were additional headwinds for the loonie this month.

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