Private Wealth Managment

Asset Allocation – July 2017

PDF of Global Asset Class Returns click here

S&P 500 advanced 2.1% in July and has yet to record a negative month in 2017. The YTD performance stands at 11.6%. Emerging markets equities continue to be the best performing asset class in 2017 up 25.7% after advancing 5.5% in July alone. Commodities continue to lag and are the only asset class in the red down -3.1%. The technology sector is the top performer in the S&P 500 up an impressive 22.3% driven by the FANG stocks.  On a equal-weight basis Health Care and Technology are both up 20%.  Energy and telecom are the only two sectors in the red down -10.4% and -5.1% respectively. Interestingly, Telecom in Canada is the top performing sector up 9.2% while energy is the worst off 11.5%. The divergence between emerging markets equities and energy and material sector returns continues to warrant close monitoring.

YTD Performance

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Across the board defensive positioning is outperforming cyclicality in 2017. Defensive sectors are outperforming more cyclical sectors, large cap is beating small cap, growth over value and low volatility over high beta. While we believe, these trends will continue to persist, June and July exhibited some mean reversion towards cyclicality as high beta names returned 2.7% in July.  Momentum continues to be the factor to watch up 22.2% YTD thanks to its large allocation to US Technology (>40%).

S&P TSX Sector Performance YTD

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Of interest, the Canadian dollar has surged over the last two months up 3.9% in July, following a 4.1% move in June. It is now up 7.7% YTD against the USD. The US Dollar index remains one of the worst performing currencies in 2017, down 9.1%, helping put a bid into some commodities. Very quietly, Gold is up over 10% and copper is up 15% after a 7% move in July.

Major Currency YTD Performance

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This document may contain certain forward-looking statements. These statements may relate to future events or future performance and reflect management’s current expectations. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Although the forward-looking statements are based upon what management believes to be reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Neither the Funds nor their respective managers assume any obligation to update or revise any forward-looking statement to reflect new events or circumstances. Actual results may differ materially from any forward-looking statement. Historical results and trends should not be taken as indicative of future operations. The Fund is not guaranteed, its value changes frequently and past performance may not be repeated. Unless otherwise indicated and except for returns for period less than one year, the indicated rates of return are the historical annual compounded total returns including changes in security value. All performance data take into account distributions or dividends paid to unit holders but do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns.

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