Purpose Multi-Strategy Market Neutral Fund December Commentary

Fund Commentary

The Fund seeks to provide absolute returns that are not correlated to broader equity or bond markets. The Fund employs a multi-strategy approach by allocating its assets across various asset classes including equities, currencies and commodities.

The Fund was positive in December with gains coming from equities and commodities.

In equities, the best performing sectors were technology, healthcare and consumer discretionary while energy, materials and staples were the worst.

In currencies, the best performer was long Chilean peso which rallied after the outlook for further rate cuts diminished given above-target inflation. Chile also had little exposure to oil relative to other emerging markets. The worst performer was long Turkish lira which came under pressure amid a backdrop of renewed local political unrest and contagion concerns emanating from the sell-off in the Russian ruble.

In commodities, short gasoil was the best performer and long heating oil was the worst performer. Energy products fell in tandem with oil prices although heating oil declined less than gasoil this month.

This month the Fund rebalanced its commodity positioning. Longs in lean hogs and cotton were replaced with longs in live cattle. Shorts in wheat were replaced with shorts in cotton.

Market Commentary

Markets were volatile into the end of the year. Weak economic data out of Japan, China and Europe dampened the global growth outlook, while heavy selling across Russian equities and the ruble dragged on emerging markets that was reminiscent of 1998. Stock indices fell early in the month as heavy selling across the energy sector and general risk reduction weighed on the broader market. However, the U.S. was the positive global influence as strong jobs and GDP numbers coupled with accommodative language from the Fed helped stem the decline and propel a recovery rally into Christmas.

Commodities saw general weakness into year end with most of the focus still on crude prices which tumbled an additional 19%. OPEC indifference continued to sway markets as the Saudis discounted crude prices for Asian customers and forecasted demand down into 2015.

The U.S. dollar closed out the year at the highs with the Fed on a course to hike rates in 2015. EUR fell to new lows on the year with many expecting the ECB to conduct further quantitative easing in early 2015. Emerging market and commodity based currencies saw weakness throughout December. CAD was no exception closing the year above 1.1600.

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