Purpose Diversified Real Asset Fund November Commentary

Purpose Diversified Real Asset Fund November Commentary

Fund Highlights

  • Cyclical sectors continued to experience a gloomy outlook as the commodities complex pared down gains from the previous month.
  • Agricultural equities were the best performing sector this month, followed closely by REITs. American Vanguard and Agrium were the top performers for the month.
  • All other sectors were negative led by base metal equities, where First Quantum reported losses and Teck Resources cut dividend.
  • In commodities, sugar was the best performer as prices continued to inch higher. Gold was the worst performer, falling to new yearly lows on the prospect of rising U.S. yields.
  • The Fund completed a quarterly rebalance this month. Stand-alone risk of base metal equities spiked recently and relative weighting was further reduced and cash allocation was increased.
  • The Fund continues to hedge U.S. dollar currency exposure maintaining a net U.S. dollar exposure of approximately 7% of the Fund’s NAV.

Market Commentary

Markets consolidated after experiencing heightened volatility over the last 3 months. The terror attack in Paris and the U.S. Thanksgiving holiday gave markets time for pause, especially ahead of an event filled December where the FOMC, ECB and OPEC all have significant meetings to close out the year. In the U.S., payroll data came in stronger than expected which fueled market expectations for a December rate hike. Despite the prospect for higher rates, the yield curve flattened as the Fed signaled a “dovish hike” and a gradual rise through 2016. Canada saw sluggish economic data as cyclical sectors continued to experience a gloomy outlook with no imminent signs of easing. Commodities faced further weakness as crude and copper fell over 10% for the month. In currencies, the loonie fell 2% as the U.S. saw broad strength. European equities outperformed while the Euro sold off near the lows of the year, as markets anticipated further dovish measures from the ECB.

Return to Post Listing

Fields marked with an * are requiredLES CHAMPS MARQUÉS D'UN * SONT OBLIGATOIRES
Fields marked with an * are requiredLES CHAMPS MARQUÉS D'UN * SONT OBLIGATOIRES

ENTER THE WORD "ANTISPAM" INTO THIS BOX
(WITHOUT THE QUOTATION MARKS)