PIM: SRI Core Income and Growth Portfolio

Paul Borisoff - Aug 03, 2018
PIM: SRI Core Income and Growth Portfolio – August 2nd, 2018 The SRI Core Income and Growth Portfolio* was up 1.7% in July - leaving the portfolio up 3.3% in 2018 – and up 11.4% over the last year. In comparison our benchmark was up 1.3% in July –

PIM: SRI Core Income and Growth Portfolio – August 2nd, 2018

 

The SRI Core Income and Growth Portfolio* was up 1.7% in July - leaving the portfolio up 3.3% in 2018 – and up 11.4% over the last year. In comparison our benchmark was up 1.3% in July – leaving it up 4.6% in 2018 – and up 12.2% over the last year.

 

* These returns are reported as a composite, time-weighted, rate-of-return (gross of fees, net of transaction charges) for all accounts in this mandate.  Long-Term Returns/Benchmark Numbers will be reported in our Quarterly Updates.

 

The Canadian stock market (S&P/TSX Composite Total Return Index) was up 1.2% in July – leaving it up 3.1% in 2018.  Over the last year it is up 11.7%. The MSCI World Net (USD) Index (50% of our benchmark) was up 2.0% in July – and is now up 7.3% in 2018.  Over the last twelve months it is up 16.7% (after adjusting for the Canadian dollar impact). 

 

In contrast the Canadian bond market (FTSE/TMX Canada Universe Bond Index) was down 0.7% in July– and is now back in negative territory in 2018 (down 0.1%).  Over the last twelve months bonds are up 2.0% though – which compares favorably to the last three-year average of 1.2% per year.   Unfortunately, we do not see much room for improvement going forward – and the possibility of a negative return on this asset class over the next year is possible if rates move higher.   We sense a growing level of frustration from investors seeking income from mainstream bond portfolios and balanced funds (which often have large traditional bond allocations)

 

The Canadian dollar moved higher in July – to $0.7687 CAD/USD from $0.7614 at the end of June – and down from $0.7948 at year-end 2017 (boosting U.S. and International returns) year-to-date. A year ago (end of July 2017) the Canadian dollar closed at $0.8013 CAD/USD – and the decrease over the last twelve months provided a boost to our non-Canadian holdings.

 

Asset Allocation – July 31st, 2018:

 

6.8% Cash, 15.5% Fixed Income, 28.8% Canadian Equity, 48.9% Global Equity.

 

Recent Updates:

 

We did not make any changes to the portfolio in June. Please do not hesitate to contact me if you have any question or concerns. 

 

Sincerely,

 

Paul J. Borisoff

Senior Vice President

Portfolio Manager, Senior Investment Advisor