SIC Multi Asset Institutional Composite

 May 2020Year to Date
SIC Institutional2.3%-4.7%

* 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

Global capital markets continued to advance in May as low interest rates, extraordinary liquidity and government backstops prompted investors to “look through” poor year to date economic data and weak corporate earnings.  For the month, the SIC Multi Asset Institutional Composite performed in line with the benchmark.  On a year to date basis, the Institutional Composite continued to trail the benchmark as the broad market advance witnessed in April and May made it virtually impossible to make up any ground lost in the first quarter without assuming undue risk.   June has begun on a positive tone and with greater market breadth.  Both small/mid-cap US and international equity indices have sprung to life.

Capital markets will likely level off over the summer months pending further developments on the containment of COVID-19 and perhaps some positive news on the vaccine front.  Recent Canadian dollar strength appears to be linked to a relief rally in energy stocks and perhaps to wider short covering.  We suspect that such strength may be temporary as the pace of the Canadian economic recovery should trail global peers owing to a heavily indebted Canadian consumer.

Terry Shaunessy
James Garcelon