Purpose Multi-Strategy Market Neutral Fund October Commentary

Fund Highlights

  • The Fund ended positive this month with gains coming from the equity and currency sleeve while commodities remained flat.
  • Both U.S. and international markets contributed positively to the Fund which experienced balanced gains. The Fund has a highly defensive posture in equity markets that continues to smooth market volatility.
  • All currency positions in the portfolio were positive as the directional trends continued. Indonesian Rupiah was the best long performer and the Swiss Franc was the best short position.
  • Commodities ended flat as the whole complex realized an increase in valuation and the long and shorts cancelled each other out.

Market Commentary

Global markets rebounded higher in October retracing most of the losses seen in the August correction. The primary catalyst for the move higher in markets was the lowering of expectations for a Fed hike in 2015, as the FOMC remained on hold in October. Sentiment appeared to shift positive despite a global economic backdrop which continued to look weak. In the US, retail sales and ISM trended lower while payrolls disappointed to the downside. Canada saw a majority Liberal victory as well as slightly positive Q3 GDP, however the Bank of Canada remained neutral continuing to downplay the outlook for the economy. European and UK PMI’s were weak, while China reported a slowdown in import activity.

This month there was considerable short-covering across the commodity cyclical complex. Crude oil rallied higher while equities were led higher by energy and materials. Emerging market currencies which were overextended to the downside the previous month were able to recover significantly in October. The CAD dollar rallied 1.8% on the back of a majority Liberal victory and stronger oil prices.

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