SIC Multi Asset Institutional Composite

 June 2020Year to Date
SIC Institutional1.4%-3.4%

* 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

June saw global equity and fixed income markets continue their recovery from the COVID-19 economic shock experienced in the first quarter.  Equities as an asset class (defined as the MSCI World Index), gained 1.5% in Canadian dollar terms, closing out one of the strongest quarters in history with a total gain of just under 15%.  Volatility remained a key feature for equities with a one-day decline of 6% on June 11th!  Barely raising the pulse of market participants!

Despite historically low interest rates, Canadian bond indices gained 1.7% for the month (5.9% for the quarter) as the Bank of Canada (along with its global central bank peers) continued to be a major buyer of bonds across the board.   As a result of these open market operations, treasury bill rates are now hovering near zero and 10-year Government of Canada bonds are yielding 0.5%.  Ultra-low interest rates (and the assurance that they will stay low for the foreseeable future) together with ample liquidity set up the advance in risk assets.  For the month, the SIC Multi Asset Institutional Composite performed in line with the benchmark but was unable to make up any ground on a year to date basis.  In July (at the half year point) we will be rebalancing portfolios, but our basic stance of overweight stocks and underweight bonds will continue.      

Terry Shaunessy
James Garcelon