August 2013 Market Recap

Global tensions and taper talk worry investors

Investor worries over when the U.S. Federal Reserve would begin tapering its massive bond buying program re-emerged in August, pushing bond   yields higher. In the U.S., the yield on the benchmark ten year U.S. Treasury Bond rose from 2.60% to 2.78%. It was the same situation in Canada, where the   yield jumped from 2.45% to 2.61% on the Government of Canada ten year bond.

This continued rise in yields caused losses in the bond market, with the DEX Universe Bond losing 0.60%. Not surprisingly, with their higher yields, corporate bonds outperformed government bonds, and short term bonds fared better than longer dated bonds. The DEX Short Term Bond Index was off by 0.07% and the DEX Long Term Bond Index fell by nearly 1.4%.

Political tensions rose as the global community discussed how to best punish Syria for the August 21 chemical weapon attack on its own citizens. Commodities, particularly oil and gold were higher. Oil gained more than 4% as worries over a new conflict in the Mid-East worried investors. This also sparked a rally in gold, which gained more than 6% on safe haven buying.

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August 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 August 2013 Investment Fund Ranking Report here.

August 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 August 2013 Socially Responsible Investing Report here.

August 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 August 2013 WRAP Fund Report here.

Portfolio Review 

Canadian equities were the big winner in August, as commodities were higher on mid-east tension. Global equities were largely flat or negative, and bonds were pushed lower on investor concerns over when the U.S. Federal Reserve would begin to slow its massive bond buying program. All of our portfolios were in the red during the month, with the Conservative portfolio posting the largest loss. Still, with 70% of the fund invested in fixed income funds, it managed to handily outpace its benchmark, thanks largely to the strong relative showing from the Manulife Strategic Income Fund and the Ivy Foreign Equity Fund. Our Balanced and Growth Portfolios were also lower, largely due to their significant global exposure.

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.