SIC Multi Asset Institutional Composite

 February 2021Year to Date
SIC Institutional0.97%0.94%

* 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

Improving prospects for post-COVID economic growth took center stage in February.  Leadership rotation was a notable feature as resource weighted equity indices, such as those for Canada and Australia, took top spot in monthly performance among their global peers.  In the US, small and mid-cap equities were the clear winners led by new bullish sentiment for the energy, financials and base metals sectors.  Bond markets reacted poorly to the prospect of strong growth and higher inflation.  The Canadian bond aggregate declined by over 3.3% for the month.  Sharply higher long term interest rates undermined some investor confidence causing market volatility to spike near month end.  

For our part, we have positioned portfolios for economic growth – meaning minimum bonds and maximum equities with a tilt toward economically sensitive markets (Europe & Asia).  As the table above illustrates, the SIC Multi Asset Institutional Composite exceeded benchmark performance in both February and on a year-to-date basis.  Year to date the Institutional Composite has led the benchmark by nearly 1%. 

We expect that widespread vaccination in North America and Western Europe, over the next two months, will continue to buoy consumer optimism which, in turn, will boost equities and dampen fixed income.    

Terry Shaunessy
James Garcelon