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It was another solid month for the portfolios, with all firmly in positive territory and all outpacing their benchmarks. Given the conservative nature of the portfolios, this is not unexpected. I have built these portfolios to deliver decent returns in most market conditions, with a particular emphasis on managing risk. Recent markets have highlighted the effectiveness of this approach.
The main contributors to the positive performance were the equity funds, specifically the Fidelity Canadian Large Cap Fund, Mackenzie Ivy Foreign Equity Fund, and Sentry Small and Mid-Cap Income Fund.
The biggest drag on performance was the Dynamic Advantage Bond Fund. This is not unexpected given its shorter duration, which will drag performance when bond markets are rallying.
As we head towards the end of the year, I expect that we will see volatility settle down to levels that we have become accustomed to. However, the potential for higher volatility remains high. As a result, I have kept the positioning of the Strategic models the same.
Within the Tactical models, I have taken a slightly more aggressive position, adding additional equity exposure in three of the five. I have also taken a slightly more growth focused position within the fixed income sleeve of the portfolios.
I continue to monitor the portfolios and will make changes as necessary to ensure they provide potential for capital growth while offering strong downside protection.