By Mike Keerma
The major North American stock indices lost ground on the week, as markets
continued to flirt with bearish sentiment. In Canada, the economy grew by
0.1% in April (2.5% annual rate), providing more support for a Bank of
Canada rate hike in July, following in lock-step with the U.S. Fed’s 25
basis point hike on June 13. However, Canadian inflation remains cooler
than expected, with May’s reading coming in at an annual 2.2% rate, pretty
much at the BoC’s 2% target. And trade tensions with the U.S. over tariffs
and NAFTA negotiations continue to dog market sentiment, making the path to
positive performance less clear. The
S&P/TSX Composite Index lost 1% on the week, while gaining 1.4% in June for a respectable 6%
advance in the second quarter, supported in part by at 16.5% surge in the
U.S. stock indices similarly lost ground on the week, while turning in only a tepid
performance for the month, as investors gravitated to the risk-off trade.
As the ultimate haven asset, however,
gold was distinctly contrary, instead posting a 1.3% loss on the week, a 3.9%
loss on the month, for 5.7% retreat in the second quarter overall.
U.S. market sentiment tilted to the bearish side, driven by protectionist
U.S. trade policies, a more hawkish monetary policy bias at the U.S.
Federal Reserve Board, and rising crude oil prices triggered by fresh U.S.
sanctions on Iran. Investors spent the week rotating asset weightings out
of equities into the perceived safety of government Treasury bonds and
S&P 500 Composite Index lost 1.3% on the week as a result, while gaining a marginal 0.5% in June
for a 3% advance in the April-June period. The
Nasdaq Composite Index also dropped in the week, losing 2.4%, while advancing 1% in June for an
overall 6.3% gain in the second quarter.
* Vanguard debuts active-management mutual funds.
Vanguard Investments Canada Inc. announced its first suite of actively
managed, globally diversified mutual funds to complement its existing
lineup of exchange-traded funds. Vanguard says it will use a unique pricing
structure in the Canadian marketplace that aligns the interests of the
sub-advisors with the funds’ investors. The maximum management fee for each
mutual fund will be 0.50%, and the management fee will vary up to that
maximum amount, based on the investment performance of each fund. The fund
lineup includes the following:
Vanguard Global Balanced Fund
Vanguard Global Dividend Fund
Vanguard Windsor U.S. Value Fund
Vanguard International Growth Fund
The first-year management fee will be effective from June 25, 2018, to June
30, 2019. The funds will be available to financial advisors through Series
F units and institutional investors through Series I units.
* IA Clarington changes Tactical Income fund name.
IA Clarington Investments
announced that it is changing the name of the IA Clarington Global Tactical Income Fund to
IA Clarington Global Allocation Fund to better reflect the strategy of sub-advisor Loomis, Sayles & Company,
which took over the management of the fund in 2015. IA Clarington said in a
release that there will be no changed to the investment objective or
strategy of the fund.
* Fidelity launches new value fund.
Fidelity Investments Canada debuted its
Fidelity Global Growth and Value Class, managed by Will Danoff and Joel Tillinghast. Fidelity says the fund
offers a core diversified equity strategy that aims to achieve long-term
capital growth by investing in companies anywhere in the world. In addition
to managing a quantitative framework to support Tillinghast’s mandate,
portfolio manager Salim Hart will support the overall management of the
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