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Mulvihill x Wealthsimple – January Commentary

Performance & Market Commentary

Stocks

Global stock markets accelerated off the December 24th market lows, recapturing some of the losses sustained following one of the worst quarters in the history of the stock market to end 2018. Stocks rallied in unison,  with EM and Canadian stocks leading the advance up 8.8% and 8.7% respectively. The portfolios remain heavily allocated to stocks, opting to lower the risk exposure within the stock allocation (low volatility) vs trimming the weight to stocks all together. We remain cautious overall  and are reluctant to chase performance of one good month when much of  our analysis continues to point to further volatility ahead.

Fixed Income

Fixed income returns were positive in January, as bonds around the globe rallied with most other asset classes. All four regions we track delivered positive performance in January with US bonds outperformed global peers for a second consecutive month. Allocation to fixed income remains as low as possible in the Growth portfolio at 15% and slightly above benchmark, at 40%, in the Balanced portfolio.

Portfolios

The three portfolios (Growth, Moderate and Conservative) recorded positive performance in January. Every ETF in the portfolios had a positive return in the month. The best performing holding was US Value stocks (RPV) up 11.3% after being a drag on portfolio performance in the previous month. US Aggregate Bonds (VBU) was the worst performer, up 0.9%. The US dollar depreciated 3.75% vs Canadian dollar in January, having a noticeable impact on performance across the Growth and Moderate portfolio’s.

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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