Purpose Total Return Bond Fund March Commentary

Market Commentary

Global stock markets were roiled by geopolitical events as Russia annexed Crimea triggering widespread condemnation of the action including Russia’s expulsion from the G-8. The U.S. Fed, now chaired by Yellen, announced a continuation of the tapering plan, with new guidelines highlighting that they would be taking a broader view than just jobs growth and inflation. They also indicated hiking interest rates beginning in 2015, a timeline which was perceived as hawkish by the market. Stock markets were generally volatile selling off mid-month and then recovering and approaching new highs by month end.

Commodities were again very active as the events in Russia continued to impact agriculture and energy exports from the region. Lean hogs were up significantly as a fatal swine disease negatively impacted production. Copper and iron ore collapsed on Chinese credit fears, while gold and silver sold off on the Fed’s hawkish guidance. Currencies saw increased volatility, with the Canadian dollar touching 1.1280 before 1.1280 before settling back down at 1.10 by month end.

Fund Commentary

The Fund was flat for the month of March. The Fund currently has exposure to high yield, investment grade and government debt.
The current portfolio is positioned to benefit from increasing demand for corporate debt, with a tilt to higher demand for high yield over investment grade debt. With yield in focus as the Fed continued its QE tapering, high yield, corporate debt and government debt were up marginally.
The Fund maintained its position of approximately 66% in high yield debt, 31% in investment grade, and 2% in government debt. The Fund maintained a cash position of approximately 1%.

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