Purpose US Dividend Fund December Commentary

Purpose US Dividend Fund December Commentary

Fund Highlights

  • The Fund kept up with the market this month as dividend yields experienced pressure under FOMCs December decision. The Fund was down -1.43% compared to the S&P500 which was down -1.58%.
  • Defensive sectors provided upside for the Fund as utilities and staples outperformed while energy and materials sectors were the biggest causes of loss for the Fund.
  • Nu Skin was the best performer this month on the back of strong sales and a positive outlook. CenterPoint Energy also climbed higher after Elliot Management, a hedge Fund activist, revealed an increased position in the company. Murphy Oil was the largest detractor as oil continued its slide.
  • With respect to the currency-hedged shares, the Fund continued to hedge U.S. dollar currency exposure maintaining a net U.S. dollar exposure of approximately 7% of the Fund’s NAV.

Market Commentary

Stocks and bonds ended lower in December to close out generally choppy performance for 2015.[Add sentence or 2 on 2015 market performance for U.S. equities, Canadian Equities, MSCI EAFE (local currency) and Canadian Fixed Income and oil and gold.] The main focus this month was on the FOMC decision. After another solid U.S. job number gave the green light for “lift off” the Fed delivered by hiking rates by 0.25% for the first time in a decade. The Fed went on to assuage concerns over the pace of future hikes by promising that the path would be gradual and data consistent. In Europe, Draghi underwhelmed on the extent of rate cuts and further QE measures which sparked a sharp rally in the Euro and European yields. In Asia, Chinese growth concerns resurfaced as the central bank allowed the yuan to weaken to its lowest level in over 4 years. In commodities, oil sold off further to new lows on the year after OPEC maintained its current production rate which disappointed potential expectations for a potential supply cut. Canada traded poorly on the back of this as the loonie and the S&P/TSX both sold off to end the year.

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