Purpose International Dividend Fund April 2016 Commentary

Fund Highlights

  • The Fund celebrated a 1-Year anniversary in April and has been a consistently strong performer in a time period where international markets have been weak and volatile.
  • The Fund was flat for the month and kept up with broad based MSCI EAFE benchmark despite a heavy overweight in Asia Developed, a very weak performer for the year (Hang Seng Index is down -25% in this time period).
  • Holdings in the materials and energy sectors provided the best returns with energy and commodity prices rallying in the month on better than expected economic data.

Market Commentary
Global markets grinded higher in April with Canadian and European equities outperforming the US. Although the IMF warned of further downside risks to growth, global economic data was largely positive this month spurring hopes for reflation. Manufacturing was stronger than expected while US payroll numbers continued to see strength. Canada surprised to the topside as retail sales and GDP figures came in better than expected. There was considerable focus on the energy meeting at Doha, however, no substantial agreement was reached on production cuts. Nonetheless, crude managed to rally almost 20% on lower inventories and a better growth outlook. Commodity cyclical and EM currencies saw significant strength vs the US dollar. The loonie rallied over 3.5% as the prospect of another BOC rate cut seeming to fade. The strength in the yen was a major focus signifying that the BOJ may have reached the limits of its monetary policy. Bonds in the US and Canada sold off from the highs, while corporate credit continued to tighten.

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