Mulvihill x Wealthsimple – July Commentary
Global Stock markets rallied in July with all four geographic regions of focus advancing. US stocks outpaced other markets up 3.7%, bringing 2018 returns to 6.5%. Canadian stocks returned 1.1% while emerging market stocks bounced 2.2% but still remain down -4.6% in 2018. The Mulvihill portfolio mandates continue to have no exposure to emerging market equities, we view US equities, specifically small cap and value oriented US stocks, as providing better risk reward opportunities.
Fixed Income remains under pressure globally in 2018 with emerging market declines leading to the downside off -2.2%. In July however, emerging market fixed income returns were the only group in the green. Our allocation to fixed income remains as low as possible in each portfolio as interest rates rise from depressed levels globally.
The three portfolios (Growth, Moderate and Conservative) recorded positive performance in July. The best performing holding in July was US Dividend Growth (DGRO) up 4.1% while exposure to Gold (CGL) continued to be a drag on performance off 2.6%. The US Dollar declined nearly 1% vs Canadian dollar, offsetting some gains in the US holdings. Exposure to the US Health Care Sector was added in the month (ZUH) while US value (RPV) was decreased.
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.