Equity markets bounced back nicely in October, and so too did the model portfolios. The Conservative Portfolio gained a modest 0.9%, while the Growth Portfolio gained a respectable 4.2%. The Balanced Portfolio was up by 2.2%.
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.
While each of the portfolios posted positive returns for the month, each lagged its respective benchmark. While this is somewhat disappointing, it is not surprising, given the conservative positioning of the portfolios.
The fixed income sleeve outperformed. The core fixed income fund, the Dynamic Advantage Bond was higher by 0.1%, modestly outperforming the FTSE/TMX Canadian Universe Bond Index, which fell by 0.3%.
Within the equity allocation, the biggest drag on performance was the Mackenzie Ivy Foreign Equity Fund, which gained 1.5%, significantly underperforming the MSCI World Index, which gained 5.4% in Canadian dollar terms. The fund has a focus on capital preservation, and has historically lagged in a rising market. Given the quality focus of the managers, I am certainly willing to forego some upside in return for the stellar downside protection the fund offers.
Despite the modest underperformance, I remain comfortable with the portfolios and their underlying holdings. I will continue to monitor them, looking for any erosion in the key risk reward metrics.