Jim Huang, President, T.I.P. Wealth Manager

FOCUS: North American Equities

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MARKET OUTLOOK:

After the initial sharp declines and subsequent recoveries early in 2016, the global stock market have been settled in a slow march upwards. Underneath the calm surface, the market leadership is quietly shifting to some of more cyclical sectors, notable the down-and-out resource stocks.  The advent of benchmark interest rate increase in the U.S. continues to create uncertainties for investors who have gotten used to a long period of lowering interest rates. Coupled with the stagnant global economic growth and talk/adoption of negative interest rates outside the U.S., the outlook has been muddled and investor confidence shaken. However, there is no imminent sign of economic recession worldwide, and global liquidity remains abundant. Whether or not the positive bias in the market can be maintained depends on the strength of global economy.  Although volatilities are likely to resurface, the risk and reward for the rest of 2016 remains favourable.

Top Picks:

Dirtt Environmental (DRT.TO)

(May 2016 @$4.67):

Dirtt (stands for “do it right this time”) is not your average prefabricated office furniture company. Founded by industry veterans including Mogens Smed, Dirtt uses its proprietary 3D software to seamless integrate the design, manufacturing and installation process, ensuring on-time, on-budget experience It is leveraging its network of partners to expand its reach globally, and create solutions to new segments like health care, lodging and residential. Despite the drag from weaker energy industry orders, Dirtt remains one of the best companies that grows organically in a big market. Recent corrections only makes Dirtt more attractive.

Nexgen Energy (NXE.V)

 (May 2016 @$2.15):

Nexgen Energy is one of the most successful uranium explorer in Canada. It’s Arrow discovery and Rook I property, even in this early stage, is already ranked one of the richest and largest uranium deposit in the world. Exploration is ongoing and the resource is likely to get bigger. Recent non-dilutive financing with notable strategic investors further strengthens the Company’s financial position.

Sleep Country Canada (ZZZ.TO)

(Jan 2016 @$15.44):

Well known for its cheeky jingo, Sleep Country Canada is the No. 1 mattress retailers in Canada.  With consumers’ increasing focus on health and wellness, good quality mattresses enjoy a broaden market. In Canada, the decline of mid-tier department store retailers opens the door for incremental market shares for strong operator. Sleep Country Canada has stepped up its powerful advertising campaign and expanded its offering to higher margin accessories. Rejoining the public market less than a year ago, Sleep Country Canada is yet to be discovered by many investors as a dominant Canadian retailer.

FUND PROFILE:

T.I.P. Opportunities Fund, series F

The T.I.P. Opportunities Fund aims to achieve superior capital growth over the long term while limiting downside risks by investing primarily in a diversified portfolio of North American equities and equity-like securities.

Performance as at: May 31, 2016

1 month: Fund 2.80%, Index* 1.00%

1 year: Fund 2.76%, Index* -3.31%

3 year: Fund 7.90%, Index* 6.77%

*Annualized Return

* Index: SPTSX Composite Total Return Index (gross return, dividend reinvested). Please note that the fund seeks absolute return and does not use a benchmark. This is only for illustration purpose.

Our returns include reinvested dividends and are net of all base/performance fees and expenses, which is 1 percent base fee and 20 percent of excess return over 6 percent net of expenses for series F.

5b. Include the top 5 holdings and weightings.

1. BNK - 2.4%
2. TCL’A - 2.1%
3. BLX - 1.4%
4. DRT - 1.3%
5. OPS - 1.2%

Website: www.tipvest.com