Purpose Duration Hedged Real Estate Fund December Commentary

Fund Commentary

The Fund seeks to provide shareholders with long-term capital appreciation by investing in a portfolio of real estate focused equities listed in North America. The Fund may reduce the risk of rising interest rates associated with real estate equity securities by tactically hedging the duration of the portfolio.

The Fund was negative in December. The best performing sectors were hotel and resort REITs, specialized REITs, and industrial REITs while the worst performing were office REITs, residential REITs and diversified REITs.

The best performing stocks in the portfolio were Rayonier, Granite Real Estate and Innvest Real Estate. The worst performers were Artis Real Estate, Can Real Estate and Dream Office Real Estate.

The Fund hedges its USD currency exposure, maintaining a net USD exposure of approximately 10% of the Fund’s NAV.

Market Commentary

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.

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