Thursday January 15th, 2015
The Fund holds a risk-balanced portfolio diversified across agriculture, energy, base metals, precious metals, and real estate. The Fund was negative in December.
The Fund’s best performers were energy stocks, metals and grains positions. There was some bottom picking in the energy sector this month with buyers looking at larger names with the most solid balance sheets. M&A activity involving the takeout of Talisman by Repsol also helped lift the sector. Precious metals rallied on safe haven flows and expectations of more stimulus from global central banks. Grain positions moved higher on an improving demand outlook for corn and soybeans.
The worst performers were crude oil and REITs. Crude continued lower this month falling another 20% bringing YTD losses to approximately 50%. REITs fell on concerns of rising rates, despite the fact that Canadian yields moved lower over the course of the year.
Markets were volatile into the end of the year. Weak economic data out of Japan, China and Europe dampened the global growth outlook, while heavy selling across Russian equities and the ruble dragged on emerging markets that was reminiscent of 1998. Stock indices fell early in the month as heavy selling across the energy sector and general risk reduction weighed on the broader market. However, the U.S. was the positive global influence as strong jobs and GDP numbers coupled with accommodative language from the Fed helped stem the decline and propel a recovery rally into Christmas.
Commodities saw general weakness into year end with most of the focus still on crude prices which tumbled an additional 19%. OPEC indifference continued to sway markets as the Saudis discounted crude prices for Asian customers and forecasted demand down into 2015.
The U.S. dollar closed out the year at the highs with the Fed on a course to hike rates in 2015. EUR fell to new lows on the year with many expecting the ECB to conduct further quantitative easing in early 2015. Emerging market and commodity based currencies saw weakness throughout December. CAD was no exception closing the year above 1.1600.