You can download our monthly portfolio report here. I have also tried a different format, using Morningstar to track the portfolios. You can check out that report here. I would love your feedback on which of these report formats you prefer.
It was a good month for the portfolios, with all finishing November in positive territory.
The Growth Portfolios were the best performers, with our Strategic Growth Portfolio gaming 3.6%, outpacing its benchmark by an impressive 0.75%. Not surprisingly, it was our conservative positioning that helped drive this outperformance. The Fidelity Canadian Large Cap Fund, with its underweight exposure to energy, materials and financials, and significant U.S. exposure was the biggest contributor in the month. In November, it gained 3.8%, handily outpacing the 1.1% rise in the S&P/TSX Composite Index.
The other big contributor was the Mackenzie Ivy Foreign Equity Fund, which gained 4.3%, beating the MSCI World Index by nearly 1%. The fund is a concentrated portfolio of high quality, well managed multinational companies is consistently one of the best performing global equity funds in volatile markets. This time around, it once again did what it was supposed to.
The U.S. funds were the laggards, dragging relative performance, despite positive returns.
Our Conservative Portfolio was the only Strategic Portfolio to underperform. This was because of the 45% allocation to the PH&N Short Term Bond and Mortgage Fund, which underperformed the broader bond markets. The Dynamic Advantage Bond Fund also lagged, which is not unexpected, given it’s very defensive positioning. It will generally outperform when the bond markets are down, but lags in rising markets.
After careful consideration, I have decided to discontinue our Tactical Models. The reason is that their performance has been very disappointing. It turned out to be a situation where our back tested numbers could not be repeated in a “real life” type environment. The volatility profile was in line with expectations, however, they underperformed more often than not and failed to add any value. Because of that, I am reverting back to our strategic models and will look to see where our tactical models went wrong. Depending on my confidence levels, I may reinstate tactical models at some point in the future, but until then, I will continue to concentrate on maintaining our Strategic Models to deliver strong risk adjusted returns while maintaining low to modest levels of volatility.
I would welcome your comments on this…