Market week: Stocks surge in second quarter
iA Clarington revamps fund lineup, Horizons launches US$ deposit ETF
In a shortened week of trading in both Canada and the U.S., the major stock indexes rose on the week as the U.S. Labor Department reported a gain of 4.8 million jobs in June, as the unemployment rate fell to 11.1%, with millions of Americans returning to work following widespread easing of COVID-19 restrictions.
The S&P 500 Composite Index advanced 4% on the week, but bled off a bit in Thursday’s session (U.S. markets were closed on Friday for the July 4 long weekend), on reports of over 51,000 new daily COVID-19 cases, with Florida alone reporting over 10,000 new infections in a single day. This raised investors’ fears that a new round of restrictions and lockdowns could be imposed across the U.S., hampering any nascent economic recovery. With a 1.8% advance in June, the S&P 500 gained nearly 20% in the second quarter but remains 3.1% below breakeven for the year to date.
The technology-weighted Nasdaq Composite Index fared better, as performance was boosted by the big tech giants such as Amazon.com Inc., Netflix Inc., Apple Corp., Facebook Inc., and Microsoft Corp. The Nasdaq rose 4.6% on the week, but surged 30.6% in the second quarter with a 6% gain in June. Year to date, the Nasdaq Composite is ahead 13.8%.
Toronto’s benchmark stock gauge, the S&P/TSX Composite Index, rose 2.7% on the week, riding the coattails of the U.S. stock market, but also boosted by the rising price of crude oil, which gained 5.7% on the week, for a 92% surge in the second quarter. Despite crude oil’s recent recovery, the price of a barrel is still down 34% year to date. Some of the edge was taken off the Toronto market last week, however, by 17.1% year-over-year decline in Canada’s GDP in April, with only a small 3% recovery in May according to a flash report from Statistics Canada.
The S&P/TSX Composite nevertheless gained 16% in the second quarter, with a 2.1% advance in June. It wasn’t enough to bring the gauge above breakeven for the year to date, as the index lags with an 8.6% loss.
Fund news and updates
* IA Clarington revamps fund lineup. IA Clarington Investments Inc. announced on June 29 a number of fund name changes, mergers, and terminations.
The following funds were renamed, effective June 29:
- IA Clarington Bond Fund is renamed IA Wealth Core Bond Pool
- IA Clarington Global Allocation Class becomes IA Clarington Loomis Global Allocation Class
- IA Clarington Global Allocation Fund is renamed IA Clarington Loomis Global Allocation Fund
- IA Clarington Global Opportunities GIF becomes IA Clarington Loomis Global Equity Opportunities GIF
The company also announced that it will merge the following funds:
- IA Clarington Growth & Income Fund merges into IA Clarington Strategic Income Fund, effective Sept. 25.
- IA Clarington North American Opportunities Class merges into IA Clarington Canadian Small Cap Fund, effective Nov. 27.
- IA Clarington Focused Canadian Equity Class merges into IA Clarington Canadian Small Cap Fund, effective Nov. 27.
In addition, the following funds will be terminated, effective Sept. 11:
- Forstrong Global Strategist Balanced Fund
- Forstrong Global Strategist Growth Fund
- Forstrong Global Strategist Income Fund
- IA Clarington U.S. Equity Opportunities Fund
* Horizons launches U.S. dollar deposit ETF. Horizons ETFs Management (Canada) on July 2 launched its new Horizons USD Cash Maximizer ETF (TSX: HSUV.U). The fund invests primarily in high-interest U.S. dollar deposit accounts with Canadian banks. Horizons says the fund aims to provide investors with an ETF-based alternative to traditional savings vehicles, like GICs and high-interest savings accounts, although the ETF is not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer.
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