Purpose Monthly Income Fund May Commentary & Fund Update

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Fund Commentary

The Fund was slightly negative in May.

Bond positions were slightly negative. High yield was the best performer, while corporate investment grade underperformed. This month the Fund maintained a relatively large weight to high yield at 33%, while decreasing its allocation to corporate investment grade bonds to 8%. Government bond positions were maintained at 3% and cash increased to 6%.

In equities, Canadian names underperformed U.S. names. Consumer stocks, industrials and utilities were the best performers, while energy was the worst as the whole sector sank along with oil prices. Canadian financials also underperformed, despite generally solid earnings, on concerns over sluggish domestic growth.

Real assets were mixed. Cocoa was the best performing commodity as El Nino concerns weighed on African supply. Soy was the worst performing commodity as ample supply outstripped demand. In addition, gold and silver positions saw gains while copper declined. This month, the Fund added soybeans and deleted wheat.

The Fund continued to hedge its USD currency exposure, maintaining a net USD exposure of approximately 10% of the Fund’s NAV. This month unhedged long USD exposure was a tailwind as CAD declined 3.5% against the U.S. dollar.

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