Purpose US Dividend Fund February Commentary

Fund Commentary

The Fund holds a diversified portfolio of high quality U.S. companies that have shown a capacity to grow and pay their dividends.

The Fund was positive in February. U.S. stock markets rebounded higher this month as geopolitical concerns seemed to diminish. U. S jobs data continued to exhibit signs of strength and the Fed was supportive in its statements. Corporate earnings were generally positive, and the energy sector saw some stabilization as oil prices rallied off the lows. The best performing sectors were technology, financials and consumer discretionary. The only negative contributor was utilities, which sold off sharply in tandem with U.S. rates.

The Fund`s top names were Coach, Western Union and CME Group, while the worst performing names were Scana, Consolidated Edison and Pinnacle West Capital.

The portfolio holds 40 US names and hedges USD currency exposure maintaining a net USD exposure at approximately 10% of the Fund’s NAV.

Market Commentary

Markets rebounded higher in February with dip buyers emerging on waning geopolitical concerns and optimism on the global growth outlook. Concerns over Greece’s ability to meet its fiscal pledges receded as bailout provisions were extended by the ECB. Generally positive U.S. earnings, strong jobs data and supportive Fed comments helped the S&P close up 5.7% on the month. European equities outperformed other developed markets as inflows increased on the back of the ECB’s supportive actions from the previous month. U.S. 10 year yields squeezed quickly back above 2% as safe haven demand declined, and the market began to price in a higher probability of a June rate hike.
In commodities, oil managed to recover off the lows with prices buoyed by news of cuts in production and the potential for supply disruption in the Middle East. Gold gave back its January gains retreating lower as safe haven demand declined.
The U.S. dollar continued to exhibit selective signs of strength notably against Japanese yen, Swiss Franc and emerging market currencies. CAD was able to recover higher buoyed by signs of oil recovery and better than expected trade deficit numbers. However, the BOC’s recent dovish comments continued to provide an overhang on the loonie with further rate cuts expected in the coming months.

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