Purpose Monthly Income Fund March Commentary

Fund Highlights

  • The Fund was up +3.7% for the month as all three sleeves positively contributed to performance.
  • In fixed income, a dovish sentiment with a reluctant outlook of further tightening of the U.S. economy in the short-term led to a rally in high yield and investment grade corporate bonds as credit spreads tightened and market rejoiced the continuation of cheap borrowing costs.
  • Real assets were boosted by real estate holdings, which rallied on the Federal Reserve’s reluctant outlook as well, and holdings in the materials sector as prices normalized from the commodity rout earlier in the quarter.
  • Dividend equities were the best performing sleeve of the month as security selection combined with strong returns in real estate and energy holdings.
  • The Fund continued to hedge U.S. dollar currency exposure maintaining a net U.S. dollar exposure of approximately 7% of the Fund’s NAV.

Market Commentary
Markets retraced higher in March with the S&P recovering almost all its year to date losses. Oil bounced off the lows in anticipation of a meeting between OPEC and non-OPEC nations to discuss production freezes. US employment numbers continued to see strength which bolstered the argument for further Fed hikes this year, however Yellen surprised the market taking an abrupt dovish turn while citing recent financial developments in her reluctance to tighten further. As a result, the US dollar sold off broadly, credit tightened and risk assets rallied. In Canada, a poor jobs number was offset by an upward surprises to retail sales and GDP. The government also announced a budget deficit plan which would include a large infrastructure spending program aimed at stimulating more growth.

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