Purpose Best Ideas Fund September Commentary

Fund Highlights

  • With much uncertainty surrounding the outlook for global growth, risk was pared back notably across growth stocks. Many high momentum growth names that had been outperforming over the year were exited abruptly and experienced significant declines.
  • SunEdison was the worst performer as it continued to decline after missing earnings the previous month. The stock is continued to be held by six managers in the Fund’s manager universe. Valeant also experienced a sudden drop after government officials promised to investigate its habit of aggressively raising drug prices. The stock is continued to be held by seven managers in the Fund’s manager universe which has twenty managers.
  • Motorola was the best performer after reporting the results of its 2bio tender offer which had been announced the previous month and it is held by three managers in the universe. General Motors had solid performance despite the Volkswagen emission scandal which might have negative short term impact on the auto industry.
  • 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 8% of the Fund’s NAV.

Market Commentary

Global markets continued to experience volatility in September with major global equity indices ending lower on the month. China remained in sharp focus as declining manufacturing and worsening economic data stoked further deflationary fears. Over the past year, the Fed has prepared the market for an imminent interest rate hike, however they stood still on rates this month citing global economic and financial developments that put further downward pressure on inflation in the near term. With much uncertainty surrounding the outlook for global growth, risk was pared back notably across cyclical sectors. Commodity prices fell led by energy and metals. In currencies, commodity currencies were broadly sold with the loonie making new lows on the year.

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