With Obama winning a second term in the White House, fears over the potential impact of the fiscal cliff of automatic tax increases and spending cuts caused a selloff in many of the commodity focused sectors. Many worry that if the cliff is not averted, the U.S. and global economy will be thrust into a recession, which will lessen demand for commodities. Precious metals companies were also hit with some disappointing earnings and company guidance, pushing stocks down further.
Given the importance of energy and materials to the Canadian market, the S&P/TSX Composite Index was down 1.28% on the month. Even a strong showing from the financial sector couldn’t pull the index into the black. Financials were strong on the month, gaining ground in the second half of the year thanks to strong earnings results and expectations for Canadian banks.
Global stocks rallied higher as investor worries over the European debt crisis were eased as some progress on a Greek bailout was reached. This news pushed the MSCI EAFE Index up by 2.4% in U.S. dollar terms. In the U.S., the S&P 500 was modestly higher, rising 0.6% in U.S. dollar terms.
However, these gains were muted because of a rise in the Canadian dollar which finished the month at $1.0068, up from $1.0004 at the end of October. In Canadian dollar terms, the MSCI EAFE was up 1.8%, while the S&P 500 was actually down 0.1%
Looking ahead, we expect that fiscal cliff headlines will dominate the economic headlines and have the potential for periods of extreme volatility.
For the month ending October 31, the best and worst performing funds were:
| Best Performing Funds for the Month |
1 Mth |
| Chou RRSP Fund |
15.77% |
| Trimark North American Endeavour Class |
5.16% |
| CI Black Creek Global Leaders Fund |
4.97% |
| Dynamic European Value Fund |
4.33% |
| Altamira European Equity Fund |
4.12% |
| Worst Performing Funds for the Month |
1 Mth |
| Dominion Equity Resource Growth Class |
-20.22% |
| Investors Canadian Natural Resources Fund |
-10.04% |
| Sentry Precious Metals Growth Fund |
-9.81% |
| TD Precious Metals Fund |
-9.28% |
| Mac Universal World Precious Metals Cl |
-9.17% |
| Best Performing Funds for the Year |
1 Year |
| CI Global Health Sciences Corporate Class |
31.42% |
| Chou RRSP Fund |
30.31% |
| Mac Universal Health Sciences Class |
28.71% |
| Brandes U.S. Small Cap Equity Fund |
28.63% |
| TD Health Sciences Fund |
24.74% |
| Worst Performing Funds for the Year |
1 Year |
| Sentry Canadian Resource Class |
-30.09% |
| Sprott Gold and Precious Minerals Fund |
-28.34% |
| Dominion Equity Resource Growth Class |
-27.18% |
| Front Street Small Cap Fund |
-26.99% |
| Dynamic Precious Metals Fund |
-26.53% |