Purpose Enhanced US Equity Fund September Commentary

Fund Highlights

  • With much uncertainty surrounding the outlook for global growth, risk was pared back notably across cyclical sectors and commodity prices fell further led by energy and metals. The Fund ended in the red this month due to an overweight in these sectors.
  • All sectors experienced decline during the month with technology outperforming the rest on the back of strong performance by Jabil Circuit which jumped higher on strong earnings. Energy, materials and industrials were the worst performing sectors.
  • The Fund does not hold any utilities or real estate securities which were the best performing sectors in the U.S. equity markets last month.
  • The Fund maintained its leverage at ~25% of NAV and had an offsetting short equity index futures hedge position of ~25%.
  • With respect to the currency hedged shares, the Fund continued to hedge U.S. dollar currency exposure maintaining a net U.S. dollar exposure at approximately 8% of the Fund’s NAV.
  • Market Commentary

    Global markets continued to experience volatility in September with major global equity indices ending lower on the month. China remained in sharp focus as declining manufacturing and worsening economic data stoked further deflationary fears. Over the past year, the Fed has prepared the market for an imminent interest rate hike, however they stood still on rates this month citing global economic and financial developments that put further downward pressure on inflation in the near term. With much uncertainty surrounding the outlook for global growth, risk was pared back notably across cyclical sectors. Commodity prices fell led by energy and metals. In currencies, commodity currencies were broadly sold with the loonie making new lows on the year.

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