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Model Portfolio

Portfolio Manager’s July Comment for Q2 Results

The upward trend of the Canadian equity market came to an end in the second quarter of 2022 with the reversal of the Materials and Energy sector performance in June.

 

In Q2, the S&P/TSX Total Return Index declined by 13.2%, the S&P 500 fell by 16.1% while the MSCI ACWI ex. USA decreased by 13.5%.

 

In Q2, NQICA returned -8.7%. The NQICA returned -8.4% while the S&P/TSX composite returned -3.9% on an annualized basis.

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In Canada, the best Q2 sectors were Energy up 2.7%, Utilities down 4.4% and Consumer Staples down 5.4%.

 

The worst sectors were Health Care down 45.8%, Information Technology down 24.1%, and Materials down 24%.

 

In Q2, the best performers in NQICA were Dollarama (DOL), Hydro One (H) and Intact Financial Corporation (IFC) up 4.6%, 3.6% and down 1.2% respectively.

 

On the other hand, the worst performers were Labrador Iron Ore (LIF), goeasy (GSY) and Leon’s Furniture (LNF) down 31.3%, 29.4% and 28.7% respectively.

Portfolio Manager’s June Comment for May Results

In May, the S&P/TSX increased by 0.1%, the S&P 500 grew by 0.2% while the MSCI ACWI ex USA rose by 1.3%.

At the end of the 12-month period ending May 31st, the S&P/TSX grew by 7.9%, the S&P 500 gained 0.3% while the MSCI ACWI ex USA decreased by 11.5%.

In May, NQICAT increased by 1.2% while it climbed 0.3% on an annual basis.

The best TSX sectors for the month of May were Energy up 11.4%, Financials up 1% and Utilities up 1.1%.

The worst performing sectors were Health Care down 16.5%, Materials down 6% and Industrials down 5.3%.

The best monthly performers in NQICAT were Parex Resource up 11.9%, Equitable Group up 10.6% and Canfor up 9.4%.

At the opposite, the weakest contributors were Leon’s Furniture down 11.4%, Labradon Iron Ore Royalty Corporation down 7.8% and Enghouse down 5.9%.

StockPointer® US Portfolio Transactions – May 2022

We have rebalanced our Stockpointer® US model portfolio. The trades are effective as of Friday, May 13 after market close.
Here are the details of the trades:

Ins:

  1. Nexstar Media Group Inc (NXST)– Market Trend. Increase in the Consumer Discretionary sector as shown by the Top 100 index, therefore, increasing our position in the portfolio.
  2. Best Buy Co Inc (BBY) – Market Trend. Increase in the Consumer Discretionary sector
  3. Meta Platforms Inc (FB) – Market Trend. Increase in the Information Technology sector

Outs:

  1. Philip Morris International Inc. (PM) – Market Trend. Decrease in the Consumer Staple sector as shown by the Top 100 index, therefore, decreasing our position in the portfolio.
  2. Verizon Communications Inc. (VZ) – Market Trend. Decrease in the Telecommunication sector.
  3. Exxon Mobil Corp (XOM) – Market Trend. Decrease in the Energy sector.

Portfolio Manager’s May Comment for April Results

In April, the S&P/TSX decreased by 5.0%, the S&P 500 fell by 8.7% while the MSCI ACWI ex USA contracted by 6.2%.

 

At the end of the 12-month period ending April 29, the S&P/TSX grew by 11.6%, the S&P 500 gained a modest 0.2% while the MSCI ACWI ex USA fell by 9.9%.

 

In April, NQICAT decreased by 7.8% while it climbed 1% on an annual basis.

 

The best TSX sectors for the month of April were Energy up 8.4%, Consumer staples up 0.2% and Telecommunication down 1.3%.

 

The worst performing sectors were Heath Care down 18.6%, Information Technology down 15.4% and Industrials down 7.9%.

 

The best monthly performers in NQICAT were ARC Resources up 6.4%, Hydro one up 3.1% and Alimentation Couche-tard up 1.7%. At the opposite, the weakest contributors were TFI International down 22.1%, Richelieu Hardware down 19.9% and Equitable down 19.6%.

 

3 stocks were sold and bought in the strategy.

 

The strategy required an increased exposure to the Financial and Energy sector and a exposure reduction in Industrials and Consumer Staples. GDI Integrated Facility Services Inc (GDI) and Metro (MRU) had the lowest SP score of their respective sector therefore they needed to be sold. Intact Financial Corporation (IFC) and ARC Resources (ARX) have been added to the strategy due to their high SP score.

 

Power Corporation (POW) was sold due to its relatively low SP score compared to other Financials. The company has been replaced by Brookfield Asset Management (BAM.A) which is in the top of its sector.

StockPointer® Canada Portfolio Transactions – April 2022

We have rebalanced the Nasdaq Inovestor Canadian Index based on our Stockpointer® Canada model portfolio. These trades are effective as of Thursday, April 14 after market close. Here are the details of the trades:

Ins:

  1. Brookfield Asset Management (BAM.A) – Market Trend. Increase in the Financial sector as shown by the Top 100 index, therefore, increasing our position in the portfolio. We chose the company because of its high SP score.
  2. Arc Resources (ARX) – Market Trend. Increase in the Energy sector. We chose the company due to its high SP Score.
  3. Intact Financial Corporation (IFC) – Intra-sectorial transaction. In the top of its sector.

Outs:

  1. Metro (MRU) – Market Trend. Decrease in the Consumer Staples sector as shown by the Top 100 index, therefore, decreasing our position in the portfolio.
  2. GDI Integrated Facility Services Inc. (GDI) – Market Trend. Decrease in the Industrial sector.
  3. Power Corporation (POW) – Intra-sectorial transaction. The company is no longer in the top of its sector.

Portfolio Manager’s April Comment for Q1 Results

The performance of the Canadian equity market continued on its upward trend, as Energy and Materials remained robust in the first quarter of 2022.

In Q1, The S&P/TSX Total Return Index rose by 3.8%, the S&P 500 fell by 4.6% while the MSCI ACWI ex. USA decreased by 5.3%.

In Q1, NQICA returned 0.8% leading to a 1-year return of 12.2% versus the S&P/TSX composite which returned 20.2% on an annualized basis.

In Canada, the best Q1 sectors were Energy up 36.2%, Materials up 19.7% and Telecommunication up 8.3%.

The worst sectors were Information Technology down 20.7%, Consumer Discretionary down 8.0%, and Health Care down 5.8%.

In Q1, the best performers in NQICA were Parex Ressources (PXT), Canadian Pacific (CP) and North West Company (NWC) up 19.3%, 13.4% and 12.9% respectively.

On the other hand, the worst performers were goeasy (GSY), Canfor (CFP) and Enghouse (ENGH) down 21.4%, 19.7% and 18.1% respectively.

Portfolio Manager’s March Comment for February Results

In February, the S&P/TSX increased by 0.3%, the S&P 500 fell by 3.0% while the MSCI ACWI ex USA contracted by 2.0%.

 

At the end of the 12-month period ending February 28, the S&P/TSX grew by 20.1%, the S&P 500 gained 16.4% while the MSCI ACWI ex USA disappointed investors by remaining unchanged.

 

In February, NQICAT increased by 0.5% while it climbed 18.8% on an annual basis.

 

The best TSX sectors for the month of January were Materials up 12.8%, Energy up 8.5% and Telecommunication up 1.6%.

 

The worst performing sectors were Information Technology down 9.7%, Consumer Discretionary down 4.3% and Heath Care down 2.8%.

 

The best monthly performers in NQICAT were Labrador Iron Ore Royalty Corporation up 19.6%,Tranforce up 8.0% and Equitable Group up 7.3%.

 

At the opposite, the weakest contributors were Leon’s Furniture down 9.3%, Enghouse down 7.2% and Hydro-one down 4.7%.

StockPointer® US Portfolio Transactions – February 2022

We have rebalanced our Stockpointer® US model portfolio. The trades are effective as of Friday, February 18 after market close.
Here are the details of the trades:

Ins:

  1. Verizon Communications Inc. (VZ)– Market Trend. Increase in the telecommunication sector as shown by the Top 100 index, therefore, increasing our position in the portfolio.

Outs:

  1. Goldman Sachs Group Inc (GS) – Market Trend. Decrease in the Financial sector as shown by the Top 100 index, therefore, decreasing our position in the portfolio.

Portfolio Manager’s February Comment for January Results

In January, the S&P/TSX decreased by 0.4%, the S&P 500 fell by 5.2% while the MSCI ACWI ex USA contracted by 3.7%.

At the end of the 12-month period ending January 31st , the S&P/TSX grew by 25%, the S&P 500 gained 23.3% while the MSCI ACWI ex USA posted a meager return of 4.1%.

In January, NQICAT increased by 0.2% while it climbed 21.6% on an annual basis.

The best TSX sectors for the month of January were Energy up 17.7%, Financials up 3.6% and telecommunication up 2.2%.

The worst performing sectors were Information Technology down 12.0%, Heath Care down 8.7% and Industrials down 3.4%.

The best monthly performers in NQICAT were Parex Ressources up 25.1%, Richelieu Hardware up 14.6% and Royal Bank of Canada up 8.0%. At the opposite, the weakest contributors were goeasy down 17.4%, Transforce down 13.5% and Canfor down 9.9%.

3 stocks were sold and bought in the strategy.

The strategy required an exposure reduction to the Material sector for 2 stocks. Winpak (WPK) and CCL Industries Class B (CCL.B) had the lowest SP score therefore they needed to be sold. Leon’s Furniture (LNF), a consumer discretionnary, and Canadian Pacific Railway (CP), an industrial, were added to the portfolio due to their high SP scores.

Kirkland Lake Gold (KL) was sold due to its anticipated merger with Agnico Eagle (AEM). AEM has a lower SP score, so we replaced KL for a company with a higher SP score i.e. Labrador Iron Ore Royalty (LIF).

StockPointer® Canada Portfolio Transactions – January 2022

We have rebalanced the Nasdaq Inovestor Canadian Index based on our Stockpointer® Canada model portfolio. These trades are effective as of Friday, January 21 after market close. Here are the details of the trades:

Ins:

  1. Canadian Pacific Railway (CP) – Market Trend. Increase in the Industrial sector as shown by the Top 100 index, therefore, increasing our position in the portfolio. We chose the company because of its high SP score.
  2. Leon’s Furniture (LNF) – Market Trend. Increase in the Consumer Discretionary sector. We chose the company due to its high SP Score.
  3. Labrador Iron Ore Royalty Corporation (LIF) – Intra-sectorial transaction. In the top of its sector.

Outs:

  1. Winpak (WPK) – Market Trend. Decrease in the Material sector as shown by the Top 100 index, decreasing our position in the portfolio. The company had the lowerst SP score and EPI of this sector.
  2. CCL Industries (CCL.B) – Market Trend. Decrease in the Material sector. The company had the second lowest SP score, the lowest score was Canfor. We decided to sell CCL over Canfor because we think Canfor’s outlook is significantly better than CCL.B, an element that the SP does not consider.
  3. Kirkland Lake Gold (KL) – The company will merge with Agnico-Eagle (AEM) on March 31 2022. We sell the stock in anticipation of this merger. AEM is not in the top of its sector.