Purpose Duration Hedged Real Estate Fund March 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 positive this month. The Fed pushed back expectations of a rate hike this year on concerns of moderating growth. This month real estate was the strongest sector as interest rates sank after the FOMC.

This month the best performing REIT sectors were residential, hotel and resort and specialized, while the worst were healthcare, retail and diversified.

The best performing stocks in the Fund were Mid-America Apartment, Hospitality Properties and Home Properties. The worst performers were Calloway, Dream Office and Brookfield Canada Office.

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

Market Commentary

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.

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