Monday December 8th, 2014
The Fund holds a risk-balanced portfolio diversified across agriculture, energy, base metals, precious metals, and real estate.
The Fund was negative in November due to the downdraft across commodities and the energy sector. The Fund’s best performers were staples, materials and REITS stocks. Food staples names saw strong earnings and good growth prospects across the sector. Mining companies experienced a bounce off the lows, while investors continued to seek out attractive yields in REITS.
The worst performers were energy stocks, crude oil, and copper. Crude oil plummeted 18% driven by inventory overhang and OPEC‘s refusal to cut production. Energy equities were indiscriminately sold as the whole sector fell.
The Fund completed its quarterly rebalance adding Boardwalk Real Estate, Can Real Estate, Dream Global and Baxter Energy, while removing New Gold, Pacific Rubiales Energy and Yamana Gold.
Stocks moved higher this month. In the U.S., generally strong data continued to support a positive economic outlook for 2015, and widen the economic gap between the U.S. and other developed countries. Conversely, Japan and Europe saw weakening economic data which prompted the BOJ and ECB towards even more aggressive stimulus measures in order to fend off deflationary pressures. In addition, the Bank of China unexpectedly cut rates to improve liquidity sending global stocks higher. Commodities were under pressure all month highlighted by an 18% plunge in crude prices. The end of month OPEC meeting was pointed to as a potential catalyst for stemming the fall in prices; however OPEC kept its production ceiling unchanged escalating its price war with other oil producing nations. The U.S. dollar pushed higher this month in particular against the Japanese Yen and currencies from commodity exporting nations. The loonie sold off in tandem with oil prices as USD/CAD closed at the year highs above 1.1400.