Terry Shaunessy, president and portfolio manager at Shaunessy Investment Counsel

Focus: Exchange-traded funds
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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 below target so that an expected rise in short-term interest rates will be limited and should 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) – $17.95

HORIZONS EURO STOXX50 INDEX ETF (HXX.TO) – $29.65

ISHARES CORE MSCI EMERGING MARKETS IMI INDEX ETF (XEC.TO) – $25.35
 

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


PAST PICKS: DECEMBER 16, 2016

ISHARES S&P US MID-CAP INDEX ETF (XMC.TO)

  • Then: $17.17
  • Now: $17.43
  • Return: +1.51%
  • TR: +2.64%

ISHARES S&P/TSX CAPPED MATERIALS INDEX ETF (XMA.TO) – Sold on March 14, 2017 at $13

  • Then: $12.01
  • Now: $12.42
  • Return: +3.41%
  • TR: +3.75%

ISHARES CORE MSCI EAFE IMI INDEX ETF (XEF.TO)

  • Then: $26.46
  • Now: $29.03
  • Return: +9.71%
  • TR: +12.11%

TOTAL RETURN AVERAGE: +6.16%
 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
XMC Y Y Y
XMA Y Y Y
XEF Y Y Y


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 MAY 31, 2017:

  • 1 month: Fund* 0.2%, Index** 0.6%
  • 1 year: Fund* 14.1%, Index** 11.4%
  • 3 years annualized: Fund* 9.4%, Index** 8.4%

* Net of Fees
** Index: 5% Treasury 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): 10.5%
  3. iShares MSCI EAFE ETF (XEF.TO): 10.4%
  4. BMO Mid Term US IG Corp Bond ETF (ZIC.TO): 9.9%
  5. Horizon S&P/TSX 60 ETF (HXT.TO): 7.2


PERSONAL TWITTER: @TerryShaunessy
COMPANY WEBSITE: www.shaunessy.com