Market week: TSX buoyed by Bank of Canada
Fund news from Mackenzie, Picton Mahoney, NEI
U.S. stock market indexes edged up on the week as investors reacted to a surge in COVID-19 cases throughout the U.S., and digested a decline in the early numbers for the widely-followed University of Michigan’s consumer sentiment index, which fell to 73.2 in July from 78.l in June. In the meantime, U.S. retail sales rose 7.5% in June but may be dampened in July as a result of the surge in COVID-19 cases. With Congress returning on Monday, investors are also anticipating further U.S. stimulus after the current unemployment benefit expires at the end of July.
In Canada, the Bank of Canada’s July 15 rate announcement kept the target overnight rate at 0.25%, and BoC Governor Tiff Macklem stated at a press conference that interest rates are low “and they’re going to be there for a long time.” The Bank’s Monetary Policy Report released on the same day sees Canadian real GDP shrinking 7.8% this year but growing 5.1% in 2021 and 3.7% in 2022. In addition, investor sentiment was buoyed by Statistics Canada’s report that wholesale sales rose 5.7%, to $52.6 billion, in May.
Toronto’s S&P/TSX Composite Index advanced 2.6% on the week with gains in financial, telecom, and energy issues, outpacing the 1.3% rise for the S&P 500 Composite Index and the flat performance for the Nasdaq Composite Index. Crude oil also remained flat on the week, while gold edged up marginally.
Fund news and updates
* Mackenzie revises strategy for TOBAM funds. Mackenzie Investments on July 15 announced a change in strategy to its suite of TOBAM mutual funds. Each fund will invest substantially all its assets to track its associated TOBAM index, each of which aims to create a more diversified portfolio relative to the market capitalization weighted benchmarks. The changes became effective July 15:
- Mackenzie High Diversification Emerging Markets Equity Fund will be renamed Mackenzie Maximum Diversification Emerging Markets Index Fund.
- Mackenzie High Diversification Canadian Equity Class becomes Mackenzie Maximum Diversification Canada Index Class.
- Mackenzie High Diversification Global Equity Fund will change to Mackenzie Maximum Diversification All World Developed Index Fund.
- Mackenzie High Diversification European Equity Fund will be renamed Mackenzie Maximum Diversification Developed Europe Index Fund.
- Mackenzie High Diversification US Equity Fund becomes Mackenzie Maximum Diversification US Index Fund.
- Mackenzie High Diversification International Equity Fund changes to Mackenzie Maximum Diversification All World Developed ex North America Index Fund.
* Picton Mahoney launches long-short fund. Picton Mahoney Asset Management on July 15 debuted its new Picton Mahoney Fortified Long Short Alternative Fund. The fund is offered in both mutual fund and ETF (TSX: PFLS) versions.
The fund invests in long and short securities, aiming for less net equity market exposure through the use of short positions compared with a long-only equity strategy and is designed to dampen volatility and mitigate downside risk relative to typical long-only portfolios heavily exposed to broad market movements.
* NEI launches RI bond fund. NEI Investments announced on July 14 the launch its NEI Global Impact Bond Fund. The fund is sub-advised by Wellington Management Canada, an affiliate of Boston-based asset manager Wellington Management Company, and invests in a diversified mix of high-quality government, corporate, and sovereign bonds from around the world. To be included in the fund, bond issuers’ products, services, or funding objectives must be designed to address prevalent social and environmental issues. The fund is available only from NEI.
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