Despite the high levels of volatility in the markets in September, our model portfolios held up relatively well. While none failed to stay in positive territory, they all were able to outpace their benchmarks in the month.
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The biggest contributors to the absolute performance was the TD U.S. Blue Chip Equity Fund, and the Mackenzie Ivy Foreign Equity Fund. Both finished in positive territory. The Manulife Strategic Income Fund was also firmly in the black, however the strategic portfolios had very little exposure to the fund.
On a relative basis, it was the Fidelity Canadian Large Cap Fund that was the strongest contributor. While it posted a small loss on the month, its defensive positioning allowed it to handily outpace the energy and materials heavy S&P/TSX Composite Index.
I am very pleased to see that the portfolios did exactly what they were supposed to do in volatile times. I have positioned each of the portfolios more conservatively in anticipation of the return to volatility. I expect that we will continue to see higher than normal volatility for the next several weeks. As such, I continue to position the portfolios very conservatively. I am willing to forego upside in return for a better downside risk profile.
Within the tactical portfolios, I made a couple slight changes in the Balanced and the Growth portfolios to make them a bit more defensive. Within the Balanced Portfolio, I pared back my exposure to Fidelity Small Cap America and sold my position in CI Black Creek Global Leaders Fund. With the proceeds, I added a 10% weighting in the Mackenzie Ivy Foreign Equity Fund.
In the Growth Portfolio, I sold 5% of the CI Black Creek Global Leaders Fund and added it to the RBC Global Corporate Bond position.
I continue to monitor the performance of the portfolios and will make changes as necessary to ensure they provide potential for capital growth while offering strong downside protection.