Purpose Premium Yield Fund March Commentary

Fund Highlights

  • The Fund was positive this month as equities bounced back in March and written options were pushed even more out of the money.
  • Volatility declined heavily as well reducing liabilities of the Fund, helping positive performance.
  • Of all puts written, two ended the month in the money as underlying names performed well and pushed the majority of all put options further out of the money.
  • The Fund was not put into any securities and the portfolio remains composed completely of written put liabilities.
  • The Fund sold 21 additional puts and maintains cash covered puts on a total of 40 securities.
  • The Fund paid its second dividend near month end which came completely out of NAV appreciation and there was no NAV grind.

Market Commentary
Markets retraced higher in March with the S&P recovering almost all its year to date losses. Oil bounced off the lows in anticipation of a meeting between OPEC and non-OPEC nations to discuss production freezes. US employment numbers continued to see strength which bolstered the argument for further Fed hikes this year, however Yellen surprised the market taking an abrupt dovish turn while citing recent financial developments in her reluctance to tighten further. As a result, the US dollar sold off broadly, credit tightened and risk assets rallied. In Canada, a poor jobs number was offset by an upward surprises to retail sales and GDP. The government also announced a budget deficit plan which would include a large infrastructure spending program aimed at stimulating more growth.

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