Market week: Profit-taking after strong April gains

Fund news: Desjardins debuts, CI merges, Harvest and Evolve terminate funds

For the most part, the big North American market indices ended the week just a hair below breakeven, after a losing session on Friday that saw markets give up gains made earlier in the week. A strong showing in April with double-digit gains across the board had investors taking some profits off the table on Friday. Investor sentiment was dampened as Amazon.com Inc. reported declining profitability and warned of further weakness, the U.S. manufacturing sector showed weakness with the ISM Manufacturing Index at 41.5 for April (a reading below 50 indicates contraction), and U.S. President Donald Trump threatened to impose fresh tariffs on China.

Toronto’s S&P/TSX Composite Index was the lone exception, booking a 1.3% gain on the week, following a 10.5% post-crash rally in April. The index’s heavy exposure to energy stocks helped sustain the rally, as crude oil bounced back 14.6% on the week (an 11.1% gain in the S&P/TSX Capped Energy Index for the week), following an overall 8% loss for crude oil in April.

The S&P 500 Composite Index ended the week with a hairline 0.3% loss on the week, following a strong 12.7% gain in April. Likewise, the technology-heavy Nasdaq Composite Index advanced 15.5% in April overall, but edged down 0.6% this past week. Gold, meanwhile, gave back 0.3% on the week after posting a 7.0% gain in April.

FUND NEWS AND UPDATES

* Desjardins adds to low-carbon ETF lineup. Desjardins Global Asset Management Inc. on May 1 debuted its Desjardins RI Developed ex-USA ex-Canada – Low CO₂ Index ETF (TSX: DRMD), which tracks the Scientific Beta Desjardins Developed ex-US ex-CA RI Low Carbon Index and primarily invests in large- and mid-cap companies from the Scientific Beta Developed Markets (ex-USA ex-Canada) universe.

* CI merges funds. CI Investments Inc. announced on April 27 plans to merge three of its investment funds into other funds with identical mandates. The mergers will result in continuing funds with a dual-class structure in which each fund offers both mutual fund and exchange-traded fund (ETF) series.

CI High Interest Savings Fund will be merged into CI First Asset High Interest Savings ETF (TSX: CSAV) and renamed CI High Interest Savings Fund.

CI First Asset Global Asset Allocation ETF (TSX: CGAA) will merge into CI Global Asset Allocation Private Pool.

CI First Asset MSCI World ESG Impact ETF (TSX: CESG) will merge into CI MSCI World ESG Impact Fund.

* Harvest shuts down resource ETF. Harvest Portfolios Group Inc. announced on April 27 that it will terminate its Harvest Global Resource Leaders ETF (TSX: HRES) ($2 million in assets) effective at the close of business on Tuesday, June 30, 2020, when it will be delisted from the Toronto Stock Exchange. All units still held by investors will be subject to a mandatory redemption as of June 30.

* Evolve terminates emerging markets ETF. Evolve Funds Group Inc. announced on April 24 that it will terminate its Sphere FTSE Emerging Markets Sustainable Yield Index ETF (TSX: SHZ) ($7.6 million in assets) on June 26 and delist the units from the TSX on June 24. All units still held by investors will be subject to mandatory redemption as of June 26.

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Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.