Purpose Monthly Income Fund March Commentary

Market Commentary

Global stock markets were roiled by geopolitical events as Russia annexed Crimea triggering widespread condemnation of the action including Russia’s expulsion from the G-8. The U.S. Fed, now chaired by Yellen, announced a continuation of the tapering plan, with new guidelines highlighting that they would be taking a broader view than just jobs growth and inflation. They also indicated hiking interest rates beginning in 2015, a timeline which was perceived as hawkish by the market. Stock markets were generally volatile selling off mid-month and then recovering and approaching new highs by month end.

Commodities were again very active as the events in Russia continued to impact agriculture and energy exports from the region. Lean hogs were up significantly as a fatal swine disease negatively impacted production. Copper and iron ore collapsed on Chinese credit fears, while gold and silver sold off on the Fed’s hawkish guidance. Currencies saw increased volatility, with the Canadian dollar touching 1.1280 before 1.1280 before settling back down at 1.10 by month end.

Fund Commentary

The Fund was up marginally for the month of March as the Fund’s exposure to real assets, bonds and dividend paying equities all generated positive returns during the month.

The best performing sectors for income equities were energy, consumer staples and telecommunications, while the worst performing sectors were health care, information technology and industrials. Among real assets, the best sectors were agriculture and energy while the worst sectors were precious metals and base metals. The bond allocation was flat in March although the largest exposure, high yield corporate credit, was the Fund’s best performing sector. The Fund continued to hedge its USD currency exposure, maintaining a net USD exposure of approximately 10% of the Fund’s NAV.

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