The market volatility that started in February stuck around in March, taking investors for another wild ride. When all the dust settled, equity markets were lower and bond markets rallied. Turning to the portfolios, each finished the month in negative territory.
Turning to the portfolios, they each had a solid month given the market environment. The worst performer was the Growth Portfolio, which was down 1.1% in the month. Our Conservative Portfolio was lower by 0.1%, while the Balanced Growth Portfolio and Balanced Portfolio finished modestly higher, posting gains of 0.6% and 0.5% respectively.
For a detailed review of the portfolios’ performance and risk reward metrics, you can download our standard monthly portfolio report here. Additional detail can be found in these reports generated by Morningstar. A summary report can be downloaded here, while the more detailed report can be downloaded here.
The S&P/TSX Composite Index was down 0.16%, thanks to a bounce in the heavyweight energy sector which rallied sharply higher on the back of rising crude prices. Real Estate was another bright spot in the market, while financials and tech were laggards. In the U.S., the S&P 500 lost 2.54% on the back of a tech selloff on news that millions of Facebook users had their data mined by Cambridge Analytica in the runup to the U.S. election. Other tech names including Amazon, and Google were also lower in the month. Also weighing on stocks was President Trump’s escalation of a trade war with China by implementing tariffs on a number of Chinese goods. China retaliated with tariffs on many U.S. goods, further heightening the tensions.
Global stocks were also largely weaker, with the MSCI World Index lower by 2.1%, MSCI EAFE was down 1.8% and Europe was lower by 1.1. In the aftermath of the trade tensions, China was down by 3.3%.
With market volatility higher, investors fled to the relative safe haven of government bonds, pushing prices higher. For the month, the FTSE/TMX Canada Universe Bond Index rose by 0.75%, with government bonds handily outpacing corporate bonds. In addition to the safe haven appeal of government bonds, corporates faced a significant headwind coming from a near record setting volume of new issues, keeping gains in check.
Turning to the portfolios, the fixed income funds were positive, while the equity funds were negative. The defensive positioning of the Fidelity Canadian Large Cap and Mackenzie Ivy Foreign Equity Fund saw them outperform their respective benchmarks, while the more growth focused TD U.S. Blue Chip Fund trailed its index.
Looking ahead, higher levels of market volatility appear to be here to stay. These portfolios are very well positioned for a more volatile market environment, with an emphasis on quality and reasonable levels of valuation. Given this, I remain very confident in the portfolios as they are positioned.