Global Equity (C$)
Toron AMI's Global Equity strategy is designed for investors seeking to diversify their portfolios through exposure to international equities. Investors benefit from access to global markets with lower volatility.
In March, investors took comfort from fact that the overall economic outlook remains promising, despite signs that the political transition in the U.S. may not be proceeding as smoothly as initially hoped and concerns about the president's ability to push through tax cuts. The MSCI World Index returned 1.8% for the month and 5.8% for the first quarter, and the S&P500 index posted its best quarterly return since the fourth quarter of 2015 with Information Technology stocks leading the way. Consumer Discretionary and Healthcare stocks also outperformed over the month. The Global Equity portfolio returned 1.6% for the month and 5.7% for the quarter, with strong performance from stocks in the Utilities, Consumer Staples and Telecommunications Services sectors.
|
Gross in (%)
|
YTD
|
2016
|
2015
|
2014
|
2013
|
2012
|
2011
|
2010
|
2009 |
Inception
|
|
Toron Global (C$)
|
5.7
|
-0.2
|
24.2
|
20.1
|
27.7
|
13.5
|
2.3
|
5.4
|
19.0
|
8.5
|
|
Benchmark
|
5.8
|
3.8
|
18.9
|
14.4
|
35.4
|
13.3
|
-3.4
|
6.2
|
11.1
|
5.1
|
|
Value
+/
-
|
-0.1
|
-4.0
|
5.3
|
5.7
|
-7.7
|
0.2
|
5.7
|
-0.8
|
6.9
|
3.4
|
| eVest 1Q 2017 |
5Y UMC
|
5Y DMC
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Ratio
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10Y UMC
|
10Y
DMC
|
Ratio
|
| Global Equity |
85.5
|
56.5
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1.51
|
78.2
|
58.3
|
1.29
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| Total Return Equity |
99.2
|
54.9
|
1.8
|
82
|
63.7
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1.29
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UMC = Up Market Capture vs. Benchmark
DMC = Down Market Capture vs. Benchmark
Ratio = UMC / DMC (Ratio > 1 equates to benchmark out-performance)
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Global Equity Inception Jan '98 NAV $4,867
| (gross C$) |
Jan |
Feb |
Mar |
Apr |
May |
June |
Jul |
Aug |
Sept |
Oct |
Nov |
Dec |
YTD |
|
2017
Monthly(%)
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
(gross C$)
|
From Inception
|
10Years
|
5Years
|
3Years
|
2Years
|
1Year
|
|
Growth of $1,000
|
$4,867
|
$2,380
|
$2,118
|
$1,474
|
$1,181
|
$1,109
|
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Rate of Return (%Ann)
|
8.5
|
8.2
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16.2
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13.8
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8.7
|
10.9
|
|
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Total Return (C$)
The Canadian Total Return Equity strategy is designed for long-term investors seeking above-average total returns and growing
dividends. Investors benefit from the strategy's diverse exposure to Canadian equities with less volatility than the market.
In March, investors took comfort from fact that the overall economic outlook remains promising, despite signs that the political transition in the U.S. may not be proceeding as smoothly as initially hoped. The reflation trade seems to have slowed as defensive sectors performed well over the month: Utilities, Telecommunication Services and Consumer Staples. Financials and Healthcare were weaker this month, with Healthcare the worst performing sector for the first quarter and Financials performing worse partly due to allegations of inappropriate sales tactics. The S&P TSX Composite Index returned 1.3% over the month, for a first quarter return of 2.4%. The Canadian Total Return Equity portfolio returned 2.6% for the month and 3.6% for the quarter, to outperform the benchmark. The portfolio's strongest performance was seen in the Energy, Industrials and Utilities sectors.
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Gross in (%)
|
YTD |
2016 |
2015 |
2014 |
2013 |
2012 |
2011 |
2010 |
Incepti
on
|
|
Cidel TR
|
3.6
|
19.3
|
-1.3
|
11.3
|
20.1
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12.4
|
1.2
|
13.6
|
10.5
|
|
Benchma
rk
|
2.4
|
21.1
|
-8.3
|
10.5
|
13.0
|
|
-8.7
|
17.6
|
8.3
|
|
Value
+/
-
|
1.2
|
-1.8
|
7.0
|
0.8
|
7.1
|
5.2
|
9.9
|
-4.0
|
2.2
|
|
(gross C$)
|
From Inception |
10YR |
5YR |
3YR |
1YR |
YTD |
|
Growth of $1,000
|
$6,144
|
$2,331 |
$1,754
|
$1,302
|
$1,157 |
$1,009
|
|
Rate of Return (%Ann)
|
|
8.0
|
11.9
|
9.2
|
|
|
|
new Preferred Shares Current Yield 4.9%
With economic growth around the world becoming more synchronized, the likelihood of economic momentum sustaining itself has improved. In March, there was no new issuance in the Canadian preferred share market, while there should be some upcoming new issuance from the banks. This lack of activity has increased demand in the market moving prices higher and yields lower. Expectations for interest rates are that the Federal Reserve may increase rates two or possibly three times over 2017. While in Canada expectations indicate no increases for 2017. The focus of the portfolio continues to be on rate reset preferred shares with later reset dates and higher spreads, while opportunistically adding perpetual rate preferred shares to the portfolio to reduce interest rate risk exposure.
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Pooled Funds:
Key strategies are now available in the form of pooled funds for accredited investors with a minimum investment of 50K. For more information and terms please download the FAQ below as well as the full Offering Memorandum and Subscription Agreement.
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Available
|
For Download
|
Size
|
|
Pooled Funds
|
|
275k
|
|
Pooled Funds
|
|
487k
|
|
Subscription Agreement
|
|
703k
|
|
|
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Other Key Strategies : Links To Fact Sheets
|
1 Year
|
3 Year
|
5 Year
|
|
|
1.5
|
4.0
|
3.5
|
|
|
12.4
|
10.4
|
11.7
|
|
|
9.3
|
2.3
|
7.6
|
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AI IS COMING WHETHER YOU LIKE IT OR NOT
by Arthur Heinmaa, CFA
The first quarter ended with both the bond and equity markets generating positive returns. The S&P 500 was up 5.5%, the MSCI 5.9% and the bond market followed with a modest positive return. Two things were surprising about this quarter. First, it occurred with very little volatility and second, despite the lack of volatility we also had the longest losing streak for the markets in 5 years. Needless to say Trump was a constant fixture in the news but what caught our eye were recent comments by US Treasury Secretary Steven Mnuchin. It is worrying that an administration ostensibly focused on job creation seems to be wholly unaware of the impact that artificial intelligence (AI) will have on the economy and employment.
When asked about AI during an interview in March, Mr. Mnuchin said "It's not even on our radar screen." Asked when it would become a concern, he said "50 to 100 more years." It seems that yet another member of the Trump administration is divorced from reality. Whether it is driverless cars, automated fast food, medical imaging, bricklaying, inventory management and even journalism, all have AI applications that are in testing phases right now. The challenge of AI in the economy demands serious analysis and a timely, serious policy response. Just closing your eyes to the changes will not make them go away.
Consider the trucking and food service industries. At the end of this year platooning of trucks is expected to begin. Platooning means that the trucks, although with a driver, will be driven in convoy by computers that operate synchronized driving and braking, resulting in 10% cost savings in fuel alone. This is the first step to eliminating truck drivers all together. Similarly, McDonalds is implementing restaurants that are almost fully automated. The new robots work 50x faster with no chance for error. The payback on the investment is quick and the company's profits rise. This is great for investors but a thoughtful government policy response to the broader social implications should be considered.
The typical response is that just like the ubiquitous buggy whip manufacturers of yore, the truck drivers and fast food workers will simply retrain and find other jobs. Here is our concern: when the buggy whip manufacturers were phased out, it occurred over a long period of time and at different rates in different parts of the world, and against a backdrop of industrialization that created many new opportunities. In today's era of turbo charged capitalism we can see large numbers of people displaced in a short period of time, with no obvious source of new opportunities in the volume to absorb them. Trucking alone employs 3.5 million people in the U.S., with millions more around the developed world. No amount of trade barriers will stop this potential displacement.
For holders of capital, this may be a period during which returns continue to rise as labour continues to be displaced by capital. It would not be inconceivable to see a rush by companies and investors alike to participate in this technological change. Understanding how this trend will impact companies is key to identifying investments to buy and others to avoid. However in this period of prosperity we cannot lose sight of people who, through no fault of their own, will lose their jobs.
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Media Appearances:
- Robert Spafford on BNN March 30th
- http://www.bnn.ca/video/cenovus-shares-close-lower-on-back-of-conocophillips-deal~1090096
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If you would like to receive additional information about Cidel's investment programs please do not hesitate to call or send me an email. I would be happy to follow up at your convenience.
Best Regards,
James Rider
Direct: 604-685-4414
Cell: 778-882-4773
skype: jamesrider1
The information contained in this report has been reviewed for compliance purposes by James Porter, EVP Cidel Asset Management. If you have any questions please contact
James Porter : jporter@cidel.com
Direct Dial :1- 416-645-8741
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Past performance should not be interpreted as a guarantee of future results.
Cidel performance is reported gross of management fees.
Responsiveness - Customization - Original Research - Prudence - Continuous Alignment
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James Rider
DD 604-685-4414
Cell 778-882-4773
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