CAD August Market Performance

Noteworthy Developments

Global equities (MSCI ACWI Index) appreciated strongly in USD, albeit with high volatility. CAD strengthened (2.3%) vs. the USD, muting returns measured in CAD terms. The ACWI Index sharply declined by 5.6% the first week of the month before furiously rallying to end August up 0.2% (2.5% USD).

Global Equities

Global equities increased 0.2% (2.5% USD). US Large cap equities (S&P 500) were up 0.1% (2.4% USD). International developed equities (MSCI EAFE Index) were up 0.9% (0.5% in local currencies), with European equities up more than outpacing those in Japan. Emerging market equities were down 0.7% (1.6% in USD and 0.4% in local currency) with Brazil (4.3% and 6.7% USD) and Taiwan (1.0% and 3.3% USD) equities performing well. Globally, both value stocks (0.3% and 2.7% USD) and growth stocks (flat and 2.4% USD) performed relatively in line. Defensive sectors such as healthcare (3.2% and 5.5% USD) and consumer staples (2.7% and 5.0% USD) performed best while the energy sector (-2.8% and -0.5% USD) and consumer discretionary sectors (-1.6% and 0.7% USD) performed worst.  US small-cap stocks (-3.8% and -1.5% USD) performed poorly as investor worries about US economic growth intensified following soft job market data.

Fixed Income

The ICE BOFA Canada Broad Market Index was up 0.5%,and the government, provincial, municipal, and corporate bond indexes were all up between 0.5% and 0.6%. Modest interest rate declines drove performance.

Alternatives

The HFRX Global Hedge Fund Index was down 1.9% (+0.4% USD), with most strategies delivering positive trend performance. . Convertible arbitrage and credit strategies (at -1.2% and +1.1% USD, respectively) performed best, while global macro/trend following performed worst (-3.8% and -1.5% USD).

Manager Comments

Alphadyne: -4.2% (-1.9% USD):

Underperformance vs. HFRX Global Index (-1.9%) driven by certain relative value bets especially with regards to, especially regarding US interest rates.

Linden: -0.7% (1.6% USD):

Outperformance vs. HFRX Global Index (-1.9%) was largely driven by idiosyncratic events surrounding certain Linden positions.

Wasatch Small Cap Value: -4.1% (-1.8% USD):

Underperformance vs. MSCI ACWI Index (0.2%) due to exposure to US small-cap stocks, which significantly underperformed US large-caps (-3.8% vs. flat) due to investor worries surrounding US economic strength as job market data was weaker than expected.