Portfolio Manager’s August Comment for July Results

In July, the S&P/TSX increased by 2.6%, the S&P 500 rose by 3.2% while the MSCI ACWI ex USA increased by 4.1%.

At the end of the 12-month period ending July 31, the S&P/TSX grew by 8.2% S&P 500 did better and grew1 13% while the MSCI ACWI ex USA performed best and increased by 14.0%.

In July, the NQICAT increased by 3.1% while it climbed 13.5% on an annual basis.

The best TSX sectors for the month of July were Health care up 18.5%, Energy up 9.3% and Materials up 6.4%.

The worst performing sectors were Telecommunication down 6.3%, Consumer Staples down 2.5% and Utilities down 1.1%.

The best monthly performers in NQICAT were, goeasy Ltd. up 15.9%, ARC Resources Ltd. up 13.7% and TFI International up 12.5%.

At the opposite, the weakest contributors were Telus Corporation down 7.5%, Enghouse Systems down 7.2% and Intact Financial Corporation down 4.8%.

The model required a higher sector allocation towards Consumer Discretionary while reducing the Material sector

We sold Nutrien Ltd (NTR) mainly due to its lower SP score and its less robust EVA track record compared to the other materials in the portfolio, namely Stella-Jones Inc (SJ) and Labrador Iron Ore Royalty Corporation (LIF).

To increase our Consumer Discretionary allocation, we bought Restaurant Brand International (QSR) due to its strong SP score and robust profitability in all market environments compared to other Consumer Discretionary stocks