SIC Multi Asset Institutional Composite


August 2018

Year to Date

SIC Institutional






* 5% T Bills, 35% Canadian Bond Composite, 20% TSX Composite TRI, 20% S&P 500 C$ TRI, 20% MSCI EAFE (Net) C$ TRI


The S&P 500 Index gained 3.6% in August outperforming all other global asset classes.  The divergence between the US and other global equity markets was pronounced.  The MSCI World Index excluding the US declined by 1.8% resulting in an absolute spread between US and other global equities of over 5% in just one month.  Moreover, the extent of the monthly rise in the S&P 500 can be attributed primarily to 3 out of 11 industry sectors and 6 out of 500 stocks.  We find this to be disturbing.  The narrowness of the current US equity rally resembles the environment which preceded previous market tops (2000 & 2007).

The SIC Multi Asset Institutional Composite declined by 0.5% in August underperforming the benchmark for both the month and on a year to date basis.  Our underperformance can be attributed to: 1) our emphasis on value oriented international markets (30% versus 20% for the benchmark); and 2) our decision to reduce US equities to a neutral weighting based on valuation and the lack of market breadth (20% versus 25% in July and 20% for the benchmark).  Uncertainty with respect to NAFTA and other trade related issues continue to cloud the investment horizon and prompt us to be cautious.  In August, we reduced our equity allocation from 70% to 65%.  Further strength in the US equity markets or new bad news with respect to global trade would likely cause us to further reduce our equity allocation in favour of cash.


Terry Shaunessy
James Garcelon