Purpose International Dividend Fund May 2016 Commentary

Fund Highlights

  • International markets were largely positive in May.
  • British securities were the largest contributors to Fund performance even as the FTSE 100 remained largely flat (-0.18%) for the month.
  • The Fund trailed the MSCI EAFE Index (+3.36%) as Asia Developed remained a weak spot for the Fund with the Hang Seng Index down -1.2% in May.
  • Energy and Materials, which were the best contributors last month were laggards in May and cyclical sectors led returns with Health Care and Consumer Discretionary the best performers.

Market Commentary
Markets ended higher this month on the back of general positive sentiment. Despite numerous macro overhangs, such as possible Fed rate hikes, a weaker yuan and an impending Brexit vote markets continued to climb the wall of worry. US data was better than expected across manufacturing, retail sales and jobs which bolstered calls for a rate hike by July. Canadian GDP and trade data were worse than expected, with the negative effects of the Alberta fires yet to filter into the data. The divergent economic pictures caused the loonie to sell off 4% on the month. Commodities continued to grind higher with crude finding comfort near $50. Investment grade credit and high yield remained in the sweet spot for investors wanting to own risk while also earning an attractive yield.

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