June 2013 Market Recap

Traders spooked by prospect of early end of QE3

I think a lot of the last few weeks have been an overreaction to the true situation. U.S, Fed Chairman Ben Bernanke only said that he will be slowing down bond purchases (which we already knew) and would base that slowdown on economic statistics (which we already knew). The only thing that sort of came as a surprise is that he expects to meet the thresholds sooner than he had originally expected – later this year or early next year instead of next year or later. He also reiterated that even once they stop buying bonds, rates will still remain on hold for a while. So really, I don’t get the panic.

Looking at the bigger picture, economic fundamentals in the U.S. are on the rebound. Housing is doing well, and consumer confidence is strong and gaining strength. Granted, it’s a long way from generating big job numbers or anything close to having the economy running at full capacity, but it continues to move in the right direction. In Canada, it’s less of a rosy picture, so rates here are more than likely on hold for even longer.

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June 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 June 2013 Investment Fund Ranking Report here.

June 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 June 2013 Socially Responsible Investing Report here.

June 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 June 2013 WRAP Fund Report here.

Portfolio Review 

With bond and equity markets ravaged by uncertainty, our portfolios’ streak of positive months ended in June, with all in the red for June. With bond yields skyrocketing, it was not surprising to see our fixed income heavy Conservative Portfolio sink by 1.6% in the month. While this is disappointing, thanks to a 1.2% gain in the Mackenzie Ivy Foreign Equity Fund, it managed to modestly outpace its benchmark.

At the other end of the risk curve, our Growth Portfolio was down 1.8% in June, but is still up by more than 12% on the year-to-date basis. A few of the funds including IA Clarington Canadian Small Cap, and the Ivy Foreign Equity Fund handily outpaced their benchmarks, resulting in a strong relative showing for the portfolio.

Despite the recent losses, the portfolios continue to deliver risk adjusted returns that are significantly stronger than their respective benchmarks. Their absolute return levels are well within our expected ranges based on the risk reward profile of each portfolio.

You can download our detailed Portfolio Review here.