SIC Multi Asset Institutional Composite
|August 2021||Year to Date|
* 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
US Equity markets continued to advance in August supported by strong corporate earnings and reassuring comments from Chairman Powell at the Federal Reserve’s annual Jackson Hole Conference. August marked the seventh consecutive month of market gains with new all-time index highs being recorded almost every trading day. The story remains the same – exceptionally low interest rates encourage capital flows into equities and alternative asset classes (private equity, cryptocurrency, etc.) despite lofty valuations. For the month, the SIC Multi Asset Institutional Composite trailed the benchmark marginally but remained ahead on a year-to-date basis.
So long as central banks remain accommodative and pandemic setbacks are taken in stride, global equity markets will continue to see gains. As a rule, stock market cycles end when central banks tighten, liquidity is reined in, and interest rates rise. The current cycle will most certainly end the same way… but not just yet. In the meantime, we remain near maximum equity allocations and continue to rebalance into market strength. With respect to the fixed income allocation, we are gradually reducing duration.