Friday June 12th, 2015
[vc_row el_position=”first last”] [vc_column] [vc_column_text el_position=”first last”]
The Fund was negative in May. North American markets were mixed this month as U.S. equities posted gains, while Canadian equities ended lower.
Global economic data was generally mediocre. U.S. GDP contracted 0.7% although this was widely attributed to seasonal factors which are expected to reverse later in the year. Job growth remained steady which supported the Fed’s goal of raising rates in Q4. Canada GDP was worse than expected as the negative effect of the oil shock filtered through the economy.
This month, consumer stocks, industrials and utilities performed well. Lorillard and Reynolds saw a bump higher after the FTC approved their merger deal. The worst-performing sector was energy as the whole sector sank along with oil prices. Despite generally solid earnings, Canadian financials underperformed on concerns over sluggish domestic growth.
The portfolio completed its quarterly rebalance and now holds 18 U.S. equities and 22 Canadian equities. The Fund took profit on Kraft and Lyondellbasell which were the best performers over the quarter.
The Fund continued to hedge USD currency exposure – maintaining net USD exposure at approximately 10% of the Fund’s NAV. This month, unhedged long USD exposure was a tailwind as CAD declined 3.5% against the U.S. dollar.
[/vc_column_text] [/vc_column] [/vc_row]