SIC Multi Asset Institutional Composite

  April 2020 Year to Date
SIC Institutional 6.5% -6.8%
Benchmark* 6.5% -3.5%

* 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

From the aftermath of the economic and financial collapse resulting from COVID-19, capital markets rebounded sharply in April in response to generous government aid programs aimed at boosting economic activity.   The SIC Multi Asset Institutional Composite rose 6.5% for the month – in line with the benchmark.  April’s advance made up approximately half of the decline experienced in the first quarter.

Market volatility remains elevated when compared to historical averages.  We expect this to continue and easily foresee portfolio values fluctuating by more than 1% on any given day depending on new information concerning COVID-19’s containment and/or treatment.  In time, however, we believe market anxiety will subside and that consistent short-term portfolio gains will return.

The investment environment has changed from one of late cycle economic growth (pre COVID-19) to one of economic recession followed by gradual recovery (post COVID-19).  Accordingly, portfolios were repositioned and rebalanced in mid-April to reflect this change.   Exposure to economically sensitive and international equities have been dramatically reduced in favour of more defensive North American equities.  An allocation to a Gold Bullion ETF has also been added as a hedge against further near-term disruption and perhaps in the longer term against inflation.

Terry Shaunessy
James Garcelon