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CAD January Market Commentary
CAD January Market Commentary
Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, appreciated strongly by 4.5% (3.4% in USD) with all regions experiencing positive performance. The CAD weakened by 1.1% vs. the USD.
Global Equities
Global equities climbed by 4.5%, with US large-cap equities (S&P 500) up 3.9% while international developed (+6.4%) and emerging market equities (+2.9%) also delivered positive returns. US equity performance was driven by generally strong corporate earnings and economic data, and investor relief as Trump administration tariff policy through January appeared more benign than feared. This more benign tariff news buoyed investor sentiment for international developed stocks (particularly European equities), which had been depressed as international companies were feared to have more exposure to potential negative effects from tariffs.
Globally, value stocks (+5.3%) outperformed growth (+3.7%). Communication services, healthcare, and financial sectors performed best (+9.1%, +7.4% and +7.2%) while technology and consumer staples (flat and +2.8%) performed worst.
Fixed Income
The BOFA Canada Broad Market Index was up 1.1% with performance driven by a combination of coupon income and declining bond yields. Government, provincial, and corporate bonds all climbed between 1.0% to 1.2%. Bond yields declined by 15bps to 25bps across the curve.
Alternatives
The HFRX Global Hedge Fund Index was up 2.1% (+1.0% USD) with most strategies delivering positive performance. Long/short equity and convertible arbitrage strategies performed best (+3.2% and +2.8%) while global macro / trend following strategies performed worst at +0.8% .
Manager Comments
Alphadyne: 3.5%
Outperformed the HFRX Index (2.1%) and global macro/trend following strategies (0.8%) due to successful interest rate bets in the US and Japan. Both macro directional and relative value trades contributed to strong performance.
Eminence: 6.8%
Outperformed the MSCI World and US SMID Cap indexes (4.6% and 4.4% respectively) with positive performance from idiosyncratic positions driving outperformance.
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.