Purpose Multi-Strategy Market Neutral Fund November Commentary

Purpose Multi-Strategy Market Neutral Fund November Commentary

Fund Highlights

  • The Fund benefited from its multi-asset class long/short exposures and had a very strong month with gains coming across all asset sleeves amid volatile equity and fixed income markets.
  • U.S. equity exposure contributed positively to Fund performance. International exposure performed slightly negative on weakness in materials demand. The Fund reduced its defensive posture in equity markets as volatility declined.
  • In currencies, the Taiwan Dollar was the only negative contributor. All other currency positions contributed positively and provided boost to the Fund’s performance.
  • Commodities fared well on the back of short positions in energy as oil declined ~10% in November.
  • The Fund replaced ten (10) U.S. equity positions in November along with one commodity and one currency.

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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