Purpose Multi-Strategy Market Neutral Fund March 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 March with all 3 asset classes posting gains.

Equities were positive despite broader U.S. markets ending lower this month. The best performers were healthcare, consumer discretionary and staples, while tech and energy were the laggards.

Currency was the best performing asset class with longs and shorts posting gains. During the month, we replaced long Turkish lira with Brazilian real, which subsequently saw a strong rally after the Fed’s dovish statement helped emerging market currencies recover higher. High local Brazil rates and recent progress over budgetary deficits also helped the real appreciate. Euro was the best performing short as the currency sank to 12 year lows this month, as the ECB began its sovereign debt purchase program. We replaced short Swiss franc with short Canadian dollar.

In commodities, short sugar was the best performer as ample supply pushed prices down over 14%. Long heating oil was the worst performer as continued oversupply was an overhang for the energy complex.

Market Commentary

North American markets stalled after rallying the previous month and ended lower in March. There was much focus on the FOMC meeting this month with many expecting a strong push for a rate hike later this year in light of continued strong job growth. As anticipated, the Fed removed the word “patient” from its statement, however there were some dovish undertones that resulted in a rally in bonds as the outlook for a potential hike was pushed back.

In commodities, oil tested new cycle lows near $40, but managed to bounce into month end on the back of rising Middle East tensions as Saudi Arabia was drawn into the conflict in Yemen.

The USD dollar continued to grind higher, especially against Eurozone currencies. CAD saw further weakness, despite rates being kept on hold, as the Bank of Canada warned of economic slowdown resulting from the shock in oil prices.

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