Purpose International Tactical Hedged Equity Fund November Commentary

Purpose International Tactical Hedged Equity Fund November Commentary

Fund Highlights

  • Geo-political disruptions such as the Paris attacks gave global markets time to pause especially ahead of an event filled December where the FOMC, ECB and OPEC all have significant meetings to close out the year. The Fund had slightly negative performance this month.
  • Securities in Australia and Japan were the best performers in November, whereas U.K. and Swiss holdings performed poorly.
  • Hedge positions in Asia Developed and Australia performed well, whereas hedges in Japan and Europe detracted from Fund performance.
  • The Canadian dollar had a balanced performance against the basket of non-hedged currencies and the Fund was flat on any gains/losses from currency exposures.

Market Commentary

Markets consolidated after experiencing heightened volatility over the last 3 months. The terror attack in Paris and the U.S. Thanksgiving holiday gave markets time for pause, especially ahead of an event filled December where the FOMC, ECB and OPEC all have significant meetings to close out the year. In the U.S., payroll data came in stronger than expected which fueled market expectations for a December rate hike. Despite the prospect for higher rates, the yield curve flattened as the Fed signaled a “dovish hike” and a gradual rise through 2016. Canada saw sluggish economic data as cyclical sectors continued to experience a gloomy outlook with no imminent signs of easing. Commodities faced further weakness as crude and copper fell over 10% for the month. In currencies, the loonie fell 2% as the U.S. saw broad strength. European equities outperformed while the Euro sold off near the lows of the year, as markets anticipated further dovish measures from the ECB.

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