PIM: SRI Core Income and Growth Portfolio
Paul Borisoff - Apr 04, 2018
PIM: SRI Core Income and Growth Portfolio – April 3rd, 2018
The SRI Core Income and Growth Portfolio* was flat in March (unchanged) – leaving the portfolio down 0.4% in 2018 – and up 8.3% of the last twelve months. In comparison our benchmark was down 0.7% in March – leaving it down 0.6% in 2018 – and up 5.8% 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 first two months of 2018 have been difficult for Canadian investors. While the Canadian bond market (FTSE/TMX Canada Universe Bond Index) moved 0.8% higher in March it remains up only 0.1% in 2018 – and 1.4% over the last twelve months. The Canadian stock market (S&P/TSX Composite Total Return Index) was down 0.2% in March though– leaving it down 4.5% in 2018 – and up 1.6% over the last twelve months.
While global markets were down more than Canadian markets in March, they have fared much better year-to-date and over the last year after translated into Canadian dollars. The MSCI World Net (USD) Index (50% of our benchmark) was down 1.6% in March – leaving it up 1.5% in 2018 – and 10.2% higher over the last twelve months (adjusting for the Canadian dollar).
Note, the Canadian dollar moved slightly lower in March to $0.7754 CAD/USD from $0.7792 at the end of February – and down from $0.7948 at year-end 2017 (boosting U.S. and International returns). A year ago, though (end of March 2017) the Canadian dollar closed at $0.7509 CAD/USD – with the increase over the last year having the opposite impact compared to early 2018.
Asset Allocation – March 31st, 2018:
6.7% Cash, 16.1% Fixed Income, 28.1% Canadian Equity, 49.1% Global Equity.
We reduced our exposure to our largest position - the iShares MSCI Global Impact ETF (MPCT) - from ~ 19.5% of the portfolio at the end of February to 18.1% at the end of March – with the proceeds used to increase our cash position to 6.6% at the end of March – up from 4.9% at the end of February. Our reduction of MPCT locked-in a 16.8% gain on this portion of the portfolio (excluding distributions).
Our primary reason for making this change when we did was to make the portfolio more conservative – and a little more defensive for the time being as we expect that the level of volatility in the market will remain elevated over the next few months.
Please note that our next summary and quarterly commentary will be available by Wednesday, April 11th, 2018. In the meantime, please do not hesitate to contact me if you have any question or concerns.
Paul J. Borisoff
Senior Vice President
Portfolio Manager, Senior Investment Advisor