PIM: SRI Core Income and Growth Portfolio

Paul Borisoff - Sep 07, 2017

The SRI Core Income and Growth Portfolio* was up 0.9% in August – and is now up 5.6% in 2017.  In comparison our benchmark was up 0.7% in August and is now up 3.6% in 2017.  Over the most recent 12-month rolling period the portfolio is up 6.5% compared to our benchmark which is up 7.4%.

* 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.

After dropping 1.9% in July, the Canadian bond market rebounded 1.4% in August (as measured by the FTSE TMX Canada Bond Index - 15% of our benchmark) as fear levels ratcheted back up once again, partly due to the North Korean situation.   Year-to-date the Canadian bond market is now up 1.8%, while it is down 1.4% over the last year.

The Canadian dollar finished August effectively unchanged from the end of July.  It is up ~7.1% in 2017, and 4.7% in the last 12 months relative to the U.S. dollar – which has negatively impacted the value of our many of our Global positions.   

Asset Allocation – August 31st, 2017:

4.2% Cash, 16.4% Fixed Income, 29.5% Canadian Equity, 49.9% Global Equity.

Recent Portfolio Adjustments and Updates:

We sold the portfolio’s 3.2% position in the iShares CDN Real Return Bond Index ETF in August at $23.91 per unit – resulting in an approximate return of -3.6% since adding it to the portfolio in July 2016.  We then increased the portfolio’s position in the NEI Global Total Return Bond Fund (PF) to 6.4% of the portfolio from 4.7%.  We also added a new short-term fixed income position in August as we eliminated our direct exposure to inflation protected bonds.

Our new fixed income position was the addition of a 3.5% weight in the iShares ESG 1-5 Year Corporate Bond ETF to the portfolio.  ESG refers to the Environmental, Social and Governance screening factors that are additionally employed in the SRI (Socially Responsible Investing) approach.  This ETF has an MER of 0.12% and sees to track the investment results of an index composed of U.S. dollar-denominated, investment-grade corporate bonds having remaining maturities between one and five years and issued by companies that have positive ESG characteristics while exhibiting risk and return characteristics similar to the parent index (Bloomberg Barclays US Corporate 1-5 Year index).

We also added a new 5.0% portfolio position in the CC&L Global Alpha Fund (F series) to the portfolio.  Global Alpha, part of Connor, Clark & Lunn, is a signatory to the UN – Principles for Responsible Investing (PRI) initiative.  Global Alpha:

  • Integrates ESG issues into investment analysis and decision-making process
  • Actively incorporates ESG into proxy voting
  • Seeks appropriate disclosure on ESG issues by the entities in which they invest.

This fund seeks to provide long-term capital appreciation by investing into a portfolio of Global Small Capitalization securities.  As of July 31st the portfolio had the following geographic exposure: 49.9% U.S., 24.5% Europe & Middle East, 10.0% Japan, 8.6% (Asia, ex-Japan), 3.0% Canada, and 4.0% Cash.

The Fund’s Top 5 Investment Themes are:


  • Innovation: Miniaturization, Connectivity, Sensor Technology & Mobility
  • Consumer Products: Emerging Market Consumer, E-Commerce, Leisure Society, Millennials
  • Environment: Pollution Control, Waste/Water/Air Management, Alternative Energy, Energy Savings
  • Demographics: Aging Population, Urbanization, Infrastructure, Safety & Comfort
  • Outsourcing: Company Focus, Balance Sheet Optimization, Efficiency & Consolidation

Please do not hesitate to contact us if you have any questions or concerns.


Paul J. Borisoff

Senior Vice President, Portfolio Manager, Senior Investment Advisor