Tuesday April 14th, 2015
The Fund holds a risk-balanced portfolio diversified across agriculture, energy, base metals, precious metals, and real estate.
The Fund was negative in March as weakness across commodities dragged on Fund returns. REITS were the only positive performer benefiting from the decline in yields after the Fed pushed out expectations for rate hikes. Ag equities, mining equities and physical commodity positions were the worst performers. Gasoil, heating oil and cocoa saw the largest declines this month as ample supply weighed on prices.
The Fund rebalanced its commodity positioning replacing gasoil longs with copper.
North American markets stalled after rallying the previous month and ended lower in March. There was much focus on the FOMC meeting this month with many expecting a strong push for a rate hike later this year in light of continued strong job growth. As anticipated, the Fed removed the word “patient” from its statement, however there were some dovish undertones that resulted in a rally in bonds as the outlook for a potential hike was pushed back.
In commodities, oil tested new cycle lows near $40, but managed to bounce into month end on the back of rising Middle East tensions as Saudi Arabia was drawn into the conflict in Yemen.
The USD dollar continued to grind higher, especially against Eurozone currencies. CAD saw further weakness, despite rates being kept on hold, as the Bank of Canada warned of economic slowdown resulting from the shock in oil prices.