September 2015 Portfolio Review

Posted by on Oct 14, 2015 in Paterson Portfolio Review | 0 comments

September was another tough month for the portfolios, with each finishing in the red.

You can download our standard monthly portfolio report here. For those looking for even more detail, I am also providing additional reports generated from Morningstar which show even more detail regarding the portfolios. A summary report can be downloaded here, while the more detailed report can be downloaded here.

Not surprisingly, it was the Growth Portfolio that suffered the biggest loss, dropping 1.1% on continued equity market volatility. Despite this disappointing result, the portfolio handily outpaced its benchmark, which fell 2.4% in the month. The defensively positioned Fidelity Canadian Large Cap and Mackenzie Ivy Foreign Equity Funds were the biggest contributors to this outperformance. In a month that saw the MSCI World Index drop by 2.4%, the Ivy Foreign Equity Fund gained 0.4%.

The Conservative Portfolio lost 0.6%, but managed to outperform its benchmark by more than 50 basis points. While the fixed income holdings were all net contributors to the outperformance, it was really the equity funds that boosted relative gains. Again, it was the Fidelity Canadian Large Cap and Ivy Foreign Equity funds that were the key reasons.

The best relative showing came from our Balanced Portfolio, which despite losing 0.9%, managed to outpace its benchmark by more than 100 basis points. All funds were net contributors to the outperformance, except for the Sentry Small Mid Cap Income Fund and TD U.S. Blue Chip Equity Fund. These two lagged their respective benchmarks in the month, and dragged overall returns on the portfolios.

Despite the negative returns, I believe the strong outperformance highlights our portfolio construction which emphasises risk management and downside protection. The portfolios continue to perform within expectations. I have no immediate concerns surrounding any of the funds in the portfolios, and continue to monitor them closely. I believe they remain well positioned to deliver above average risk adjusted returns over the long term.

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