Terry Shaunessy, president and portfolio manager at Shaunessy Investment Counsel

Focus: Exchange-traded funds
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Market Call for Thursday, June 1, 2017 was shortened due to live coverage of Ottawa announcing support for Canada's softwood lumber industry. Terry Shaunessy was unable to take viewer questions but reviewed his Past Picks and shared his Top Picks.

MARKET OUTLOOK
Global economic conditions remain favourable for stocks over the next 18 months. Economic growth will accelerate on a worldwide basis supported by rising employment/consumption, improved consumer/business confidence and new fiscal stimulus in both the U.S. and Europe. Corporate profits will be driven by revenue growth and operating leverage rather than margin expansion. Price inflation will remain within acceptable levels so that an expected rise in short-term interest rates will not derail economic progress. Bond yields will head higher as the U.S. Fed begins to slowly runoff its large fixed-income holdings and the ECB ceases its QE program. Consequently, benchmark fixed-income returns will be negligible. The S&P 500 will continue to provide attractive total returns but global index performance leadership will shift to EAFE and Europe on strong fundamentals, improved investor sentiment and significant money flows from North America. The TSX Composite will rise with its global peers but returns will lag as earnings growth flattens in the financial and resource sectors. We have positioned our global balanced portfolios to be minimum fixed income, underweight TSX Composite and overweight U.S. and EAFE allocations. We currently have no currency hedges on any of our equity allocations.

TOP PICKS

BMO MSCI EAFE INDEX ETF (ZEA.TO) – $18.61

HORIZONS EURO STOXX50 INDEX ETF (HXX.TO) – $31

ISHARES CORE MSCI EMERGING MARKETS INDEX ETF (XEC.TO) – $26.40
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ZEA Y Y Y
HXX Y Y Y
XEC Y Y Y


PAST PICKS: MARCH 14, 2016

UPDATE
Nothing sold within last 52 weeks except DLR and XHY

BMO EQUAL WEIGHT U.S. BANK INDEX ETF (ZBK.TO)

  • Then: $16.53
  • Now: $23.49
  • Return: 42.10%
  • TR: 44.86%

ISHARES U.S. HIGH YIELD BOND INDEX (XHY.TO) – Switched on May 2, 2017 to Horizon Active High Yield (HYI.TO)

  • Then: $18.88
  • Now: $20.17
  • Return: 6.83%
  • TR: 14.60%

HORIZONS U.S. DOLLAR CURRENCY ETF (DLR.TO) – Switched to BMO U.S. Pref Shares on April 5, 2017

  • Then: $13.21
  • Now: $13.40
  • Return: 1.43%
  • TR: 1.43%

TOTAL RETURN AVERAGE: 20.29%
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ZBK Y Y Y
XHY N N N
DLR N N N


FUND PROFILE: SIC MULTI-ASSET INSTITUTIONAL COMPOSITE
Shaunessy Investment Counsel offers global balanced portfolio management to families for a minimum mandate of $5 million. However, we have recently signed on as a sub-advisor to Wealthsimple so that anyone can invest in our Institutional Composite, which is the portfolio that we manage on behalf of First Nation Trusts and Foundations. Look for the Wealthsimple tab on our website: www.shaunessy.com

PERFORMANCE AS OF APRIL 30, 2017:

  • 1 month: Fund* 2.4%, Benchmark Portfolio** 2.3%
  • 1 year: Fund* 17.8%, Benchmark Portfolio** 13.5%
  • 3 years: Fund* 9.5%, Benchmark Portfolio** 8.5%

* Net of Fees
** Benchmark Portfolio: 5% T Bills, 35% Canadian Bond Universe, 20% TSX Composite TRI, 20% S&P 500 TRI (C$), 20% MSCI EAFE TRI (C$) 20%


TOP HOLDINGS AND WEIGHTINGS

  1. Vanguard S&P 500 ETF (VFV.TO): 10.5%
  2. iShares S&P 500 ETF (XUS.TO): 10.2%
  3. iShares MSCI EAFE ETF (XEF.TO): 10.2%
  4. BMO Mid Term U.S. IG Corp Bond ETF (ZIC.TO): 9.9%
  5. Horizon S&P/TSX 60 ETF (HXT.TO): 7.9%


TWITTER: @TerryShaunessy
WEBSITE: www.shaunessy.com