Purpose US Dividend Fund March Commentary

Fund Highlights

  • Dividend yielders continued to perform well as the markets rallied risky assets on the news of the Fed taking a dovish turn with regards to further tightening in the short term.
  • Security selection in the energy and consumer staples sectors significantly outperformed the index whereas selection in healthcare and underweight in information technology detracted from Fund performance. No individual sectors detracted from Fund performance in March.
  • Pfizer and Garmin were the only two securities detracting from Fund performance whereas 15 securities gained in excess of 10% during the month.
  • 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.
  • The non-currency hedged shares received strong headwinds as the loonie appreciated ~3% against the U.S. dollar.

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 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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