Jul 18, 2016
Personal Investor: Time for your mid-year portfolio checkup
By Dale Jackson
2016 is off to a bit of a twisted start. The plunge in commodity prices changed directions while international events kept global markets off balance.
We can’t change what happens on world markets but we can keep on top of how it affects our retirement savings by investing wisely. More to the point, we can’t force our investments to go up but we can attempt to limit losses when broader markets are down, and try to outperform when they are up.
A recovery in commodity prices took the TSX total return index up nearly ten per cent in the first six months of 2016. That helped Canadian stocks, but the resulting rise in the Canadian dollar from under 70 cents U.S. at the start of the year to over 77 cents at the end of June took a toll on U.S. denominated investments. While the S&P 500 hit a new high, a six per cent year-to-date gain was wiped out in Canadian dollars.
One interesting note for bond fund holders; when yields fall, prices rise. That makes bond funds one of the best performing asset classes so far this year.
Here is a list of some key mutual fund asset classes and how they performed in the first six months of 2016 compared to their benchmarks:
| ASSET CLASS | AVERAGE FUND SIX-MONTH RETURN | INDEX |
|---|---|---|
| Canadian equity | +6.3% |
TSX total return: 9.8% |
| U.S equity |
-3.1% | S&P 500 total return (in Canadian dollars): -2.9% |
| International equity | -8% |
MSCI total return |
| Canadian fixed income |
+3.6% | GlobaeCanadian fixed income peer index: +3.6% |
|
Natural resources equity |
+27.9% | Globe natural resources peer index: +26% |
| Emerging markets equity |
+2.3% | MSCI Emerging Markets (in Canadian dollars): -0.3% |
| European equity |
-9.9% | MSCI Europe (in Canadian dollars): - 10.8% |
Dale Jackson is BNN's Personal Investor. Follow him on Twitter @DaleJacksonPI
