Friday August 19th, 2016
- Large gains for the Fund in July as international markets staged a recovery following a sell-off from uncertainty around Brexit. Dividend yielders continued their strong returns in the environment with safety and income the central themes of investment in July.
- Japan and Australia were the best performing sectors, while all regions remained accretive to Fund performance.
- Energy was the only sector which detracted from Fund performance as crude prices sank 14% during the month on higher than expected inventory build ups in the U.S.
- The Fund replaced seven securities during the month; four replacements in Japan, two in Britain, and one in Europe.
July saw a continuation of a post Brexit relief rally. Although the outcome for European growth was likely long term negative, short term flows outweighed those concerns as investors needed to put money to work. Equities rallied higher with the S&P making new all -time highs, while European markets recovered higher. With central banks keeping rates at exceptionally low levels, the hunt for yield was heightened as investment grade and high yield credit rallied. Commodities experienced weakness led by the energy complex. Crude prices sank over $10 on concerns of a supply glut. As a result, commodity cyclical currencies also saw weakness. Slack Canadian economic data and worries over a housing bubble were additional headwinds for the loonie this month.