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September 2018 Pricing Commentary

Despite all the financial, investment, and political confusion during the month of September, four of our five ABC Funds posted positive investment performance over the past four weeks.

Although there was price weakness in the U.S. banks and Canadian pipelines and utilities, notable portfolio outperformers included: Activision Blizzard, Boeing, Boston Scientific, Broadcom, Danaher, Honeywell, Northrop Grumman, and Salesforce.com.

With the late September 30th signing of a tentative NAFTA deal (USMCA) and the expectation of lessening North American trade tensions combined with steady economic growth and improving corporate earnings, we anticipate the positive stock market trends to continue to year end 2018. Consequently, we are maintaining a fully invested equity stance with a continued emphasis of health care, technology, and Canadian and U.S. financials.

Irwin A. Michael Signature

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

August 2018 Pricing Commentary

The U.S. and Canadian stock markets pivoted in different directions during the month of August. For instance, while the major American equity indices rose between 2 ¼ % to 5 ¾ % the S&P/TSX Composite declined approximately 0.8%.

Largely due to our portfolios’ 65% average American equity weighting our five ABC Funds appreciated to reach new 2018 price highs. More importantly, to mitigate our currency risk exposure we continue to keep in place our 100% U.S. dollar hedge.

Among our outperforming U.S. holdings over the month include: Amazon, Centene Corp., Apple Inc., NVIDIA, Salesforce, Mastercard and Visa. As we enter the final four months of 2018 we remain very optimistic and are maintaining fully invested equity positions with a particular emphasis on health care, technology and Canadian and U.S. financials. Once again, despite our anticipation of persisting market volatility to year end 2018 we expect relatively strong North American economic activity, improved corporate earnings results and, by extension, upward trending common stock prices.

Irwin A. Michael Signature

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

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.

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