Terry Shaunessy, president and portfolio manager at Shaunessy Investment Counsel
Focus: ETFs

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MARKET OUTLOOK

The performance of global capital markets in Q1/18 was characterized by fear and controversy resulting in unprecedented volatility. Wide price fluctuations across major asset classes undermined investor confidence as fears of trade wars and central bank policy errors took centre stage.

We began 2018 with three major investment assumptions:

  1. Interest rate normalization would produce sub-standard fixed income returns resulting in a minimum allocation to this asset class.
  2. Stimulative fiscal policy led by recent U.S. tax cuts would boost corporate profits and equity values thereby supporting our maximum equity allocation.
  3. Canadian economic performance would be negatively affected by a heavily indebted consumer, unfavourable conditions in the energy sector and a sizeable current account deficit, leading us to underweight Canadian equities and remain unhedged on currency exposure.

Notwithstanding market turbulence, we have no reason to alter our investment posture. We suspect that inflammatory remarks emanating from the White House on trade and regulatory issues are politically motivated, with an eye to influencing the outcome of midterm elections in November. We don’t believe that this is the start of a Depression Era trade war. Similarly, we believe that the Federal Reserve under its new Chairman Jay Powell will continue to prudently adjust monetary policy and interest rate normalization. Recent fears of a Fed policy error are unjustified.

We remain focused on the favourable fundamental underpinnings of global capital markets and believe that portfolio returns will improve in subsequent quarters as market volatility subsides. In our opinion, a multi-asset, multi-region portfolio will continue to provide the best combination of investment return and reliable risk management in a turbulent and emotionally charged atmosphere.

TOP PICKS

Terry Shaunessy's Top Picks

Terry Shaunessy of Shaunessy Investment Counsel shares his top picks: the iShares Core MSCI Emerging Markets Index ETF, the iShares S&P/TSX Global Base Metals and the S&P 500 Equal Weight ETF.

ISHARES CORE MSCI EMERGING MARKETS INDEX ETF (XEC.TO)
Bought at $28.54.

ISHARES S&P/TSX GLOBAL BASE METALS (XBM.TO)
Bought at $15.00.

S&P 500 EQUAL WEIGHT ETF (RSP.N)
Bought at $101.90.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
XEC Y Y Y
XBM Y Y Y
RSP Y Y Y

 

PAST PICKS: JUNE 1, 2017

Terry Shaunessy's Past Picks

Terry Shaunessy of Shaunessy Investment Counsel reviews his past picks: the BMO MSCI EAFE Index ETF, the Horizons Euro Stoxx50 Index ETF and the iShares Core MSCI Emerging Markets Index ETF.

BMO MSCI EAFE INDEX ETF (ZEA.TO)

  • Then: $18.85
  • Now: $19.31
  • Return: 2.44%
  • Total return: 5.11%

HORIZONS EURO STOXX50 INDEX ETF (HXX.TO) 

  • Then: $31.39
  • Now: $32.04
  • Return: 2.07%
  • Total return: 2.07%

ISHARES CORE MSCI EMERGING MARKETS INDEX ETF (XEC.TO)

  • Then: $26.46
  • Now: $28.11
  • Return: 6.23%
  • Total return: 8.55%

Total return average: 5.24%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ZEA Y N Y
HXX Y N Y
XEC Y Y Y

 

FUND PROFILE

Shaunessy Investment Counsel (SIC) offers its global balanced portfolio management to the public through Wealthsimple. Look for the Wealthsimple tab on our website: www.shaunessy.com

The performance details are shown below:

SIC Global Multi-Asset Portfolio
Performance as of: March 31 2018 Net of Fees

  • 1 month: -0.4% fund, -0.4% benchmark portfolio
  • 1 year: 5.0% fund, 5.1% benchmark portfolio
  • 3-year annualized: 5.8% fund, 4.6% benchmark portfolio
  • 5-year annualized: 9.3% fund, 7.9% benchmark portfolio

*Benchmark Portfolio: 5% T Bills 35% Canadian Bond Universe, 20% TSX Composite TRI, 20% S&P 500 TRI (C$) 20% MSCI EAFE TRI (C$) 20%

TOP 5 HOLDINGS AND WEIGHTINGS

  1. iShares Core S&P 500 Index ETF: 10.1%
  2. iShares S&P US Mid-Cap Index ETF: 10.1%
  3. Horizon Euro Stoxx 50 Index ETF: 10%
  4. iShares Core MSCI EAFE IMI Index ETF: 10%
  5. iShares Core MSCI Emerging Markets IMI Index ETF: 10%

TWITTER: @TerryShaunessy
WEBSITE: www.shaunessy.com