February 2018 – Portfolio Review
anuary looked much like a continuation of 2017 with equity markets rallying higher, and volatility largely muted. February was a totally different story that saw the return of volatility which took equity markets on a roller coaster ride, with swings that were very reminiscent of 2008. The S&P/TSX Composite Index peaked in early January, and bottomed in mid-February, for a total peak to trough drop of more than 8%. South of the border, it was a similar story with the S&P 500 falling more than 10% peak to trough.
Fortunately, calmer heads prevailed, and markets were able to pare back some of the losses. For the month, the S&P/TSX Composite ended the month down by 3%, the S&P 500 ended 3.7% lower in U.S. dollar terms, and the MSCI EAFE Index was down 4.5%. throughout the selloff, the U.S. dollar showed strength, which muted losses for investors with unhedged currency positions. In Canadian dollar terms, the S&P 500 rose by 0.6%, while the MSCI EAFE Index was down by a very modest 0.3%.
Read MoreETF Focus List – March 2018
I am adding XBB to the ETF Focus List to replace the Vanguard Aggregate Bond Index ETF (TSX: VAB), which had been my top bond pick for the past year or so. There are a couple of reasons for this change. First, when I added VAB, it carried a management fee that was significantly lower than XBB. Until recently, XBB had a management fee of 0.30%, which resulted in an MER of 0.34%. In May 2017, iShares cut the management fee to 0.09%, which results in a significant reduction in the MER and make the two ETFs more competitive from a cost perspective. Further, the outlook for interest rates has shifted, with further increases expected. XBB has a higher exposure to corporate bonds, which results in a higher yield-to-maturity and lower duration, translating into a modestly lower sensitivity to interest rates.
Read MoreSocially Responsible Investing Report – February 2018
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 February 2018...
Read MoreWRAP Funds Report – February 2018
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...
Read MoreInvestment Fund Ranking Report – February 2018
Each month, we analyze nearly 2500 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 based on a number of key risk / reward metrics. You can download our February 2018 Investment Fund Ranking Report here.
Read MoreJanuary 2018 – Portfolio Review
2018 started much like 2017 ended, with U.S. and global markets rallying higher. The S&P 500 gained 5.7% in U.S. dollar terms, and the MSCI EAFE Index gained 5.0%. Emerging markets, driven by a 12.5% surge in China were also very strong, as the MSCI Emerging Markets Index gained 8.3%. Closer to home, the S&P/TSX Composite bucked the global trend, and sold off modestly, falling 1.4% on weaker energy. The Energy sector lost 5.4% even as the price of oil rallied higher by more than 7%.
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