SIC Multi Asset Institutional Composite

 February 2020Year to Date
SIC Institutional-4.2%-3.6%
Benchmark*-3.9%-2.2%

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

For market participants, COVID-19 will be looked back upon as one of those infrequent but universally unanticipated events to shock global capital markets.  But to be certain, it will also be analyzed for social media’s contribution in propagating misinformation and citing panic.  It is early days in the understanding of COVID-19 and we caution against taking rash actions – particularly with your investments.  

While we feel compassion for those families that have been affected by COVID-19, the fact remains, the virus’ direct impact on the global economy has been negligible.  To date, the impact witnessed has been a result of extraordinary measures taken by governments to contain the spread of the virus and as of late, self-isolation fueled by panic.  As a consequence, and without question, global economic growth will be materially affected in the first half of this year as will corporate profits.  In response, global equity markets have witnessed one of the fastest 10% corrections in history.  Bond prices rose and cyclical/international sectors came under pressure. 

For the month, the SIC Multi Asset Institutional Composite trailed the benchmark by 30 basis points and remained behind the benchmark on a year to date basis.  Our underperformance reflects our underweight position in fixed income and overweight in international equities.  We expect stimulative policy responses from all governments through lower interest rates and increased fiscal spending.  As a result, we do not plan to alter our investment view but will rebalance as market distortions occur.

Terry Shaunessy
James Garcelon