April 2013 Market Recap

Global Markets Rally Sharply Higher

Global equities continued their impressive streak of gains while  Canadian equities were lower thanks to continuing weakness in the materials and energy sectors. The S&P/TSX Composite Index shed 2.07%, while the   S&P 500 gained 0.95% in Canadian dollar terms. The star of the month was the MSCI EAFE Index gaining 4.43%, besting all other major indices. Regionally, both Europe and the Pacific Rim were sharply higher, gaining 3.7% and 5.9% respectively.

In Europe, news of a bailout agreement in Cyprus and the continuation of accommodative central bank policies were positively received by investors. Japan looks near unstoppable, with the Nikkei 225 index soaring by more than 33% since the start of the year. If we take the effect of a weakening Yen into account, the gain is lower, but still impressive at approximately 20% in Canadian dollar terms.

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April Fund Ranking Report

Each month, we analyze more than 1200 mutual funds, pooled funds, and hedge funds putting them through our proprietary quantitative valuation model. We then prepare our Monthly Fund Ranking Report which rates and ranks each of the funds in our universe.

You can download our April 2013 Investment Fund Ranking Report here.

April Socially Responsible Investing Report 

With environmental and human rights concerns becoming more important to people, interest in the Socially Responsible Investing segment has never been stronger. In an effort to help keep investors and advisors informed on the SRI funds available, we have created our monthly Socially  Responsible Investing Fund Report, which will be published on a monthly basis.

You can download the April 2013 Socially Responsible Investing Report here.

April WRAP Funds Report 

Fund of Fund or WRAP funds have consistently led the mutual funds sales stats in the past few years. Investor and advisor interest in the products are at an all time high, given the unprecedented levels of market volatility and uncertainty that is prevalent in the markets today. To help you zero in on the best WRAP funds available, we have created our new Monthly WRAP Funds Report that will be published on a monthly basis. If there is a WRAP fund that you would like to see added to this report, please contact us and we will add it for our next edition.

You can download the April 2013 WRAP Fund Report here.

April Portfolio Review 

The portfolios were again positive, chugging higher for investors in March. They have been on quite a roll of late, with the Conservative Portfolio posting positive returns for the past ten months. Moderate Balanced, Balanced and the Balanced Growth Portfolios have also been on quite a run, posting gains for the past eight months in a row.

The Renaissance Global Health Care Fund, CI Harbour, and Mackenzie Ivy Foreign Equity were the biggest contributors to the overall performance during the month. Manulife Strategic Income and CI American Value were the biggest detractors of performance.

The portfolios continue to post returns that are within expected ranges based on the risk reward profile of each portfolio.

You can download our detailed Portfolio Review here.

2013 Budget Impact – Funds closed as a result of the budget

In the budget announced March 21, 2013, the government proposed to eliminate the tax benefits associated with forward agreements used by some mutual funds to achieve capital gains treatment on income that would otherwise be treated as ordinary income.

To do this, very simply, a fund would enter into a forward agreement with a counterparty. The forward agreement would provide the fund with a rate of return that was linked to an underlying fund. The income from this forward agreement would be considered capital gains, rather than interest income. These actions will no longer be permitted.

Click here to see a list of some of the funds that were capped because of this announcement.