Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, declined by 1.1% (-0.6% in USD) with varied performance across regions. The CAD strengthened by 0.5% vs. the USD.
Global Equities
Global equities declined by 1.1%, with US large-cap equities (S&P 500) down 1.8% while international developed (+1.3%) and emerging market equities (+0.0%) performed better. Weaker US equity performance was driven by heightened uncertainty surrounding Trump’s inconsistent application of tariff policy (announcements followed by delays or pauses in implementation) and fears regarding potential US economic slowdown from the rapid and hatchet-like reduction in federal government employment, which also affects the large federal private contractor landscape. Strong international developed market performance was largely driven by robust European equity performance which benefitted from Germany’s (and likely other European nations) pledge to enact large-scale increases in defense spending.
Globally, value stocks (+1.0%) outperformed growth (-3.0%) stocks. Consumer staples, financials, and healthcare sectors performed best (+3.7%, +1.2% and +0.6%) while consumer discretionary, communication services, and technology (-5.4%, -4.1% and -2.5%) performed worst. The Magnificent Seven were down 5.8% following lackluster earnings reports relative to expectations as investors scrutinized sharply increasing capital expenditure plans in the face of slowing earnings growth.
Fixed Income
The ICE BOFA Canada Broad Market Index rose 1.1% with performance driven by coupon income and declining bond yields of 10bps-15bps across the curve. Canadian government bonds were up 1.1%, provincial and municipal bonds were up 1.3%, and corporate bonds were up 0.9%.
Alternatives
The HFRX Global Hedge Fund Index was down 0.2% (+0.3% in USD) with most strategies delivering positive performance in underlying USD terms. Credit and global macro/trend following strategies performed best (+0.3% and +0.2%) while long/short equity hedge funds performed worst at -1.0%.
Manager Comments
Linden: +1.5%
Outperformed the broader HFRX Index (-0.2%) and convertible arbitrage index (-0.3%). Strong performance driven by short equity hedge positions in volatile technology stocks, coupled with benefits from new issuances at favorable terms.
Russell 1000 Growth Index: -4.1%
Underperformed the S&P 500 (-1.8%) given its large exposure to technology, communication services, and certain consumer discretionary stocks.
CAD February Market Commentary
CAD February Market Commentary
Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, declined by 1.1% (-0.6% in USD) with varied performance across regions. The CAD strengthened by 0.5% vs. the USD.
Global Equities
Global equities declined by 1.1%, with US large-cap equities (S&P 500) down 1.8% while international developed (+1.3%) and emerging market equities (+0.0%) performed better. Weaker US equity performance was driven by heightened uncertainty surrounding Trump’s inconsistent application of tariff policy (announcements followed by delays or pauses in implementation) and fears regarding potential US economic slowdown from the rapid and hatchet-like reduction in federal government employment, which also affects the large federal private contractor landscape. Strong international developed market performance was largely driven by robust European equity performance which benefitted from Germany’s (and likely other European nations) pledge to enact large-scale increases in defense spending.
Globally, value stocks (+1.0%) outperformed growth (-3.0%) stocks. Consumer staples, financials, and healthcare sectors performed best (+3.7%, +1.2% and +0.6%) while consumer discretionary, communication services, and technology (-5.4%, -4.1% and -2.5%) performed worst. The Magnificent Seven were down 5.8% following lackluster earnings reports relative to expectations as investors scrutinized sharply increasing capital expenditure plans in the face of slowing earnings growth.
Fixed Income
The ICE BOFA Canada Broad Market Index rose 1.1% with performance driven by coupon income and declining bond yields of 10bps-15bps across the curve. Canadian government bonds were up 1.1%, provincial and municipal bonds were up 1.3%, and corporate bonds were up 0.9%.
Alternatives
The HFRX Global Hedge Fund Index was down 0.2% (+0.3% in USD) with most strategies delivering positive performance in underlying USD terms. Credit and global macro/trend following strategies performed best (+0.3% and +0.2%) while long/short equity hedge funds performed worst at -1.0%.
Manager Comments
Linden: +1.5%
Outperformed the broader HFRX Index (-0.2%) and convertible arbitrage index (-0.3%). Strong performance driven by short equity hedge positions in volatile technology stocks, coupled with benefits from new issuances at favorable terms.
Russell 1000 Growth Index: -4.1%
Underperformed the S&P 500 (-1.8%) given its large exposure to technology, communication services, and certain consumer discretionary stocks.
Sid Nadkarni
Chief Investment Officer
Sid joined Bitterroot Capital Advisors in 2019 with more than 16 years’ experience in the investment management business. Before joining Bitterroot, Sid was Senior Portfolio Manager with the Abu Dhabi Investment Authority (UAE’s sovereign wealth fund) and previously held a similar position and title for Shell Asset Management in the Netherlands. Sid began his career as an investment banker with Arthur Andersen in Virginia and then later at Lehman Brothers in New York City.