November 2013 Market Recap

Happy Holidays!!

It is hard to believe that another year has passed and the holiday season is once again upon us. I hope that you and those who are important to you have a wonderful holiday season, and a safe, happy and prosperous New Year. I also wanted to take this opportunity to thank you for your readership. I hope that you continue to find this information to be helpful. In the new year, I will be making some tweaks to my rating system and benchmarking methodology that will make my analysis more robust. I am always open to comments and questions, so please do contact me if you have any ideas you would like to share.

Thanks!

Dave

Markets higher in November Budget deal increases probability of tapering

Global equity markets rallied higher for the third month in a row, with the U.S. leading the way with a broad based rally. The S&P 500 gained more than 3% in U.S. dollar terms on an improving global economy. Factor in a weakening Canadian dollar and the gains were even higher for Canadian investors, with the S&P 500 returning nearly 5% in Canadian dollar terms

European markets were also higher, with the MSCI Europe Index gaining 1.2%. Economic numbers reinforced that Europe has turned the corner and is on the rebound. Still, risks, namely the debt levels and the modestly slow pace of growth continue to hang over the markets.

With announcements that the Chinese government would be bringing in a series of economic and social reforms, the outlook for the global economy got a little boost. In reaction, investors took Chinese funds higher, which were the best performing fund category in the month. Still, the broader Asian region was lower, muting overall gains in the MSCI EAFE, which would have been in negative territory, were it not for the Canadian dollar falling from $0.9589 US to $0.9435 US during the month.

Read more…

November 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 November 2013 Investment Fund Ranking Report here.

November 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 November 2013 Socially Responsible Investing Report here.

November 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 November 2013 WRAP Fund Report here.

November Portfolio Review 

It was another good month for the portfolios, with each posting positive returns. In fact, all portfolios managed to outpace their benchmark, except for the Growth Portfolio, which underperformed.

U.S. equity led the way higher as jobs and consumer spending looked to rebounding. Asian equities, particularly China were strong, after the Chinese government announced plans for sweeping economic reforms. Fixed income was largely flat, as yields inched higher in the month.

Within the portfolios, one of the biggest contributors to the outperformance was the Manulife Strategic Income Fund, which gained 0.80% in Canadian dollar terms, although this gain was all currency related. Another contributor to the outperformance was the Renaissance Global Healthcare Fund. Healthcare’s upward trajectory continues, with the fund gaining 7.3% in November alone, bringing its year to date return to nearly 50%.

Not surprisingly, funds that invest in the higher quality equity names were the laggards, despite posting positive returns. The CI American Value and Ivy Foreign Equity Fund were the laggards.

I monitor the performance on an ongoing basis to ensure that they continue to perform within expectations. As of November 30, they 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.