Andy Nasr, Vice President of Capital Markets and Investment Strategist, Sentry Investments

FOCUS: REITs, Global Equities & Macro Strategy

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MARKET OUTLOOK:

“It’s not easy bein’ green!”  - Kermit the Frog

If you haven’t the heard the song, Kermit, who’s initially despondent, reflects and eventually embraces his greenness. The S&P 500 leapt higher since February, as the Federal Reserve became less hawkish and the People’s Bank of China stabilized economic growth. Central banks in both developed and emerging markets are clearly demonstrating a willingness to support their economies through a combination of fiscal and/or monetary stimulus. However, central bank policies are distorting valuations in certain asset classes, such as investment grade sovereign debt. The attendant risks of low or negative interest rates, political uncertainty and an aging global population have all contributed to the volatility we’ve witnessed since the start of the year, which underscores the importance of diversification and active portfolio management. We continue to leverage our ‘house style’, which has produced excellent long-term returns, to find compelling equity and fixed income investments in various geographies. While U.S. equities may appear expensive, quarterly earnings are exceeding expectations and the S&P 500 is trading at a multiple that is consistent with low interest rates and benign inflation. Outsized capital appreciation potential exists beyond North America due to a combination of multiple expansions and an improvement in cyclically depressed corporate profits in regions such as Europe.   

Top Picks:

Live Nation Entertainment (LYV.N)

The company generates strong free cash flow, which it’s using to consolidate the global concert industry and increase its penetration of secondary market ticket sales.

Brookfield Asset Management (BAMa.TO)

Brookfield Asset Management is an asset management company that receives predictable fee income from its ownership interests in real return assets, which include geographically dispersed renewable power, infrastructure and real estate investments.

CVS Health (CVS.N)

The company provides an integrated health services platform, which includes pharmacy benefit management, retail operations and clinics. We expect free cash flow growth to be supported by increased healthcare utilization and an aging population.

Past Picks:  July 2, 2015

Enercare (ECI.TO)

• Then: $13.44
• Now: $17.57
• Return: +30.73%
• TR: +38.81%

Walt Disney (DIS.N)

• Then: $114.97
• Now: $96.03
• Return: -16.47%
• TR: -15.33%

Vornado Realty Trust (VNO.N)

• Then: $96.27
• Now: $104.60
• Return: +8.65%
• TR: +11.61%

Total Return Average: +11.70%

Fund Profile

Sentry Canadian Income Fund

Performance as of: July 27, 2016

* Index: S&P/TSX Composite Total Return

Top Holdings

1. Republic Services, Inc. - 5.7%
2. CVS Health Corporation - 5.0%
3. Oracle Corporation - 4.5%
4. Waste Connection - 3.5%
5. AltaGas Ltd. - 3.5%

Twitter: @SentryInvest

Website: http://www.sentry.ca/