Purpose Multi-Strategy Market Neutral Fund August Commentary

Fund Highlights

  • The Fund was down in August as equities, commodities and currencies were all unprofitable, but the Fund managed to significantly outperforms both the S&P 500 Index (-6.00%) and the S&P/TSX 60 Index (-4.30%).
  • Equities were negative as markets experienced a tumultuous decline this month on concerns over a slowdown in global growth and persistent worries over deflation. Energy and Consumer Discretionary were the best performing sectors, while Materials, Information Technology and Industrials performed worst.
  • Commodity positions were negative. Crude oil was extremely volatile; initially falling below $40 before spiking 25% in 3 days after OPEC suggested that they might be willing to discuss achieving “fair prices”. As a result, shorts in WTI futures were the worst performer. Lean Hog futures were the best performer on speculation of increasing demand from China.
  • Currency was the worst performing asset group as risk aversion caused carry positions to be unwound. Political unrest and fiscal pressures exacerbated moves lower in Brazilian Real and Turkish Lira. Euro and Yen shorts were also squeezed higher.

Market Commentary

Markets experienced a tumultuous decline this month as concerns over a slowdown in global growth and persistent worries over deflation triggered a dramatic fall in global equity prices. The S&P sank 6%, the SPTSX fell over 4% and the VIX fear gauge spiked to levels not seen since the crisis back in 2009. China was in the headlines as worsening economic data and a volatile stock market decline proved unnerving to investors. A surprise devaluation in the Chinese yuan shocked markets and provoked suspicions that the world’s second largest economy was in more distress than official figures might suggest. In the U.S, GDP surprised to the upside with a growth rate of 3.7%, however mixed messages from various Fed officials caused uncertainty as to the timing of potential interest rate hikes. Crude oil was extremely volatile, initially falling below $40 before spiking 25% in 3 days after OPEC suggested that they might be willing to discuss achieving “fair prices.” Currencies were mixed with most commodity and emerging currencies continuing to struggle vs the U.S dollar. CAD weakened off to new lows on the year, while euro and yen managed to rally.

Return to Post Listing

Fields marked with an * are requiredLES CHAMPS MARQUÉS D'UN * SONT OBLIGATOIRES
Fields marked with an * are requiredLES CHAMPS MARQUÉS D'UN * SONT OBLIGATOIRES

ENTER THE WORD "ANTISPAM" INTO THIS BOX
(WITHOUT THE QUOTATION MARKS)