May 2012 Market Recap

Monthly Recap

Whoever said that April was the cruelest month likely didn’t have any money   invested in the global equity markets in May. Equity markets were hit   particularly hard, with the MSCI EAFE Index dropping by more than 7% during   the month. The S&P 500 fell by 6% in U.S. dollar terms, while closer to   home, the S&P/TSX Composite Index dropped by 6.1%.

Europe was again hit very hard, with the MSCI Europe Index   sinking by 12.1% as concerns over the debt crisis continue to mount. This   time around, investors focused their attention on Spain, particularly the   country’s banks which are in serious trouble since the country’s property   bubble burst in 2008. Many banks are on the verge of failure and without a   bailout plan will go under, dragging the country with them. In Greece,   despite their best efforts, a coalition government could not be formed,   forcing the country back to the polls. These events, coupled with the   recession that is crippling the region, spurred the selloff.

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Monthly Fund Ranking Report

Each month, we analyze more than 1200 mutual funds, pooled   funds, and hedge funds putting them through our proprietary quantitative   valuation model. We then prepare our Monthly Fund Ranking Report which rates   and ranks each of the funds in our universe.

You can download our May 31, 2012 Investment Fund Ranking Report here.

Monthly Socially Responsible Investing Report 

With environmental and human rights concerns becoming more   important to people, interest in the Socially Responsible Investing segment   has never been stronger. In an effort to help keep investors and advisors   informed on the SRI funds available, we have created our monthly Socially   Responsible Investing Fund Report, which will be published on a monthly   basis.

You can download the May 31, 2012 Socially Responsible Investing Report here.

Monthly WRAP Funds Report

Fund of Fund or WRAP funds have consistently led the mutual   funds sales stats in the past few years. Investor and advisor interest   in the products are at an all time high, given the unprecedented levels of   market volatility and uncertainty that is prevalent in the markets today. To   help you zero in on the best WRAP funds available, we have created our new   Monthly WRAP Funds Report that will be published on a monthly basis. If there   is a WRAP fund that you would like to see added to this report, please contact us and we will add it for our next edition.

You can download the May 31, 2012 WRAP Fund Report here.

Model Portfolio Review

May was another disappointing month for the portfolios as   each lagged their respective benchmarks during the month. Yet   again, this underperformance was largely the result of the Cundill Value Fund,   which lost 11.2% during the month, underperforming the MSCI World Index by   nearly 7%.

Over the past few quarters, we have noticed a significant uptick   in volatility with the Cundill Value Fund which has resulted in   a big increase in volatility for the portfolios. As a result, we   felt that it was time to make a change to improve the risk reward profile of   the portfolios.

To do this, we are replacing the Cundill Value Fund with the Mackenzie Ivy Foreign Equity Fund.   It has significantly less volatility than the Cundill Value Fund, which will   bring down the overall risk profiles the portfolios. This change was   made effective June 1.

You can download our detailed Portfolio Review here.