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July 2018 Pricing Commentary

The North America equity markets moved higher during the month of July. Interestingly, the U.S. stock indices continued to outperform the Canadian indexes and this event benefited our ABC Funds which are approximately 65% U.S. weighted. Our 100% U.S. dollar hedge continues to mitigate our currency risk.

All five ABC Funds appreciated during July and are now at 2018 highs with the portfolios invested in a diversified mix of larger capitalization Canadian and American dividend paying equities. Outperforming ABC portfolio holdings over the past month include: Canadian and U.S. banks, Coca-Cola, PepsiCo, Becton Dickinson, Thermo Fisher Scientific, CNR, CP Railway and Waste Management. More importantly, after the month-end close, Apple Inc., a significant ABC Funds holding in all five portfolios, reported surprisingly strong quarterly results and has climbed to new record price highs.

Looking ahead, despite anticipated market volatility, we remain optimistic with regard to the North American economies, corporate earnings and common stocks.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

June 2018 Pricing Commentary

All five ABC Funds performed positively during the month of June. More importantly, the year to date and 12 month returns to June 30, 2018 have outpaced the Funds’ respective benchmarks.

Notable Canadian common share advancers over the past month include AltaGas, Suncor Energy, and TransCanada, whereas a few of our top U.S. gainers were Activision Blizzard, Amazon.com, Anthem, Becton Dickinson, Netflix and Salesforce.com.

While we expect periodic stock market volatility over the summer, largely due to the ongoing tariff concerns, incessant U.S. presidential tweeting, and interest rate uncertainty, we remain quite optimistic. This view is mainly due to solid U.S. and global economic growth, rising corporate earnings, increasing dividends and company share buybacks.

Additionally, we are pleased to announce that we have recently listed all five ABC Funds with Fundata Services for the distribution of our fund information. As a result, we expect our funds to be monitored by an increasing number of analytical groups, advisors, newspapers and financial media providers such as the Globe and Mail.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

May 2018 Pricing Commentary

All five ABC Funds outperformed their respective benchmarks for the month of May. These excellent returns were largely due to two important factors:

  • Our portfolios’ significant U.S. equity exposure and our relative underweighting of Canadian common stocks.
  • Our meaningful American common stock holdings of: Adobe Systems, Alphabet, Apple, Netflix, Broadcom, NVIDIA, Facebook, and Skyworks Solutions, which materially outperformed the U.S. market indices.

Looking ahead, we remain optimistic for the balance of 2018 primarily due to our positive outlook on the U.S. and world economies, relatively low inflation and interest rates, comparatively high company dividend yields, and expanding corporate earnings.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

April 2018 Pricing Commentary

The extreme stock price volatility experienced in February and March continued into the month of April. However, the excellent quarterly earnings and revenue beats of a number of our favoured portfolio holdings including Amazon, Facebook, Microsoft and Visa enabled all five ABC Funds to produce positive April investment performance. More importantly, we maintain our optimistic view that the North American and world economies are solid and that common stocks should end 2018 noticeably higher than current levels.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

March 2018 Pricing Commentary

Considering the extreme price volatility of the market we are pleased that four of our ABC Funds are still posting positive year to date investment performance.

Overall, we remain optimistic for the balance of 2018. It is our view that the equity markets are presently oversold given that we expect 15-20% U.S. corporate earnings growth in 2018 and stable to slightly higher interest rates.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

February 2018 Pricing Commentary

While there was extraordinary global stock price volatility during the month of February our five ABC Funds outperformed their respective index benchmarks during this period.

More importantly, a number of our individual stock holdings reported improved quarterly earnings and/or dividend increases in February including: CIBC, Royal Bank of Canada, CCL Industries, Suncor Energy, Bank of Nova Scotia, and Six Flags Entertainment.

Furthermore, with the U.S. corporate tax reduction, gradually rising interest rates and steady worldwide economic growth, we expect improving company profits and continued dividend increases this year. While we anticipate periodic stock market volatility, which will test one’s bullish resolve, positive investment tailwinds should push common stock prices higher in 2018.

Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

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