Purpose US Dividend Fund November Commentary

Purpose US Dividend Fund November Commentary

Fund Highlights

  • The Fund reached its 1-year anniversary this November and continues to perform strongly in the face of volatile markets.
  • Stock selection in the energy and materials sector boosted the Fund’s returns in face of weakening commodity prices while utilities were the largest detractors.
  • Emerson Electric was the largest contributor with a modest dividend increase in November. CBL & Associates REIT was the largest detractor, as shares of malls and shopping centers in general were down on expected rising rates by the end of 2015.
  • The Fund completed a rebalance this month replacing three holdings. Phillips Morris, Entergy and National Oilwell were the additions to the Fund and ConocoPhillips, Hawaiian Electric Industries and Baxter International Inc. were deleted from the portfolio.
  • 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

Markets consolidated after experiencing heightened volatility over the last 3 months. The terror attack in Paris and the U.S. Thanksgiving holiday gave markets time for pause, especially ahead of an event filled December where the FOMC, ECB and OPEC all have significant meetings to close out the year. In the U.S., payroll data came in stronger than expected which fueled market expectations for a December rate hike. Despite the prospect for higher rates, the yield curve flattened as the Fed signaled a “dovish hike” and a gradual rise through 2016. Canada saw sluggish economic data as cyclical sectors continued to experience a gloomy outlook with no imminent signs of easing. Commodities faced further weakness as crude and copper fell over 10% for the month. In currencies, the loonie fell 2% as the U.S. saw broad strength. European equities outperformed while the Euro sold off near the lows of the year, as markets anticipated further dovish measures from the ECB.

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