December 2021 Pricing Commentary North American equity markets rebounded from the November decline to register positive returns for the month of December and 2021. Consequently, in December the ABC Funds recorded new 2021 price highs with their positive performance. More importantly, the Funds’ 12 month net returns enabled all three portfolios to outperform their respective index benchmarks for the year. This achievement was largely due to several factors: 1. A fully invested equity position throughout 2021 2. Diversified and larger capitalization common stocks within each portfolio 3. Canadian/U.S. dollar currency hedge which reduced monthly price volatility Of particular relevance during the month of December was the common share outperformance of about a dozen ABC Funds’ securities including Canadian holdings of Royal Bank, TD Bank, Algonquin Power, Brookfield Asset Management, and Brookfield Infrastructure Partners and the following U.S. stocks: Apple, Broadcom, Mastercard, McDonalds, Thermo Fisher Scientific, Visa, and Zoetis. As we enter 2022, we are optimistic on the outlook for the North American economy and common stocks. This stance is based on our view that equities remain in a secular bull market bolstered by continued low interest rates and improving corporate earnings. As a result our portfolios are fully invested and will remain so for at least the first half of 2022. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
November 2021 Pricing Commentary North American equity markets started November positively, however, by late month common stocks gave up their gains to register losses for the period. Interestingly, all three ABC Funds recorded gains for November and outperformed their respective investment benchmarks. This outperformance was primarily due to two key factors: Significant appreciation of a handful of our large capitalization U.S. stocks in the consumer discretionary, health care, and technology sectors. These noteworthy American outperformers were: Amazon, Apple, Advanced Micro Devices, Broadcom, Home Depot, NVIDIA, and Zoetis. With the meaningful appreciation of the Canadian dollar at the October month end period we materially reduced our currency hedge which enabled our three heavily weighted U.S. stock portfolios to benefit from an extraordinarily strong American dollar in November With less than one month to go to the start of 2022 our portfolios remain fully invested. In fact, due to our continuing belief that we are currently in a secular bull market for equities, our optimistic outlook will continue, at least, into the first half of 2022. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
Refinitiv Lipper Fund Awards Winner Canada 2021, Best Equity Fund Family Group Over Three Years We are pleased to announce that the ABC Funds Family was awarded the 2021 Refinitiv Lipper Fund Canada Award for the Best Equity Fund Family Group Over Three Years. We are honoured and motivated to continue our pursuit of investment excellence. Furthermore, I would like to thank our investment and administration teams for their tireless efforts. Irwin A. Michael, Portfolio ManagerI.A. Michael Investment Counsel Ltd. Disclaimer The Refinitiv Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the Refinitiv Lipper Fund Award. For more information, see lipperfundawards.com. Although Refinitiv Lipper makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Refinitiv Lipper.
October 2021 Pricing Commentary North American equity markets made a remarkable recovery during the month of October after a particularly weak September. U.S. equities generally outperformed Canadian common stocks during the October period, enabling our ABC Funds to outperform their respective benchmarks. Moreover, with the Canadian dollar’s appreciation of approximately two and a half cents relative to the U.S. dollar our currency hedge mitigated our portfolios’ risk exposure. Outperforming Canadian equities during the month included: TD Bank, Bank of Montreal, TC Energy, Brookfield Asset Management, and Canadian National Railway. In the United States, our funds’ top performers were: S&P Global, Thermo Fisher Scientific, Zoetis, Home Depot, Waste Management, NVIDIA, Alphabet, Microsoft, and Salesforce. Looking ahead to the final two months of 2021, we remain optimistic with regard to the economy and common stocks. More importantly, our three ABC Funds remain fully invested and will retain this stance into 2022. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
September 2021 Pricing Commentary The month of September tends to be a volatile month for the stock market and the past month was true to form: As Brandon Michael, senior analyst at ABC Funds commented: “Investors can breathe a sigh of relief now that September, historically the weakest month of the year, is in the books. We’re now in October, a month that is typically associated with bullish reversals and above average monthly returns. Using seasonality as a guide, we are heading into the best four month stretch of the year.” On a positive note, we were pleased that the following ABC Funds’ Canadian holdings registered solid gains for the month: TD Bank, TC Energy, Enbridge, Keyera, and Pembina Pipeline. Our three main American outperformers included McDonald’s, Thermo Fisher Scientific, and Salesforce.com. In summary, we reiterate that we are optimistic with regard to the economy and common stocks leading into 2022 and remain fully invested. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
New Mailing Address Effective October 14, 2021 Please be advised that effective October 14, 2021, our new mailing address will be as follows: PO Box 47599 Toronto, Ontario M3C 3S7 While we encourage email and fax delivery of many instructions and documentation for efficiency, there are some situations which demand the physical delivery of items. For these items, we are only able to accept mail, Xpresspost and Registered Mail at the above address.
August 2021 Pricing Commentary Canadian and American stock market indices continued their upward price momentum during the month of August, led by the information technology, communications, health care, and financial services sectors. Similar to the month of July, U.S. equities outperformed Canadian common stocks enabling our three primarily American focused ABC Funds to outperform their respective investment benchmarks. During the month, our top performing Canadian holdings included Brookfield Asset Management, Brookfield Infrastructure Partners, and Canadian National Railway. Of particular importance to our August performance was the proposed takeover of WPT Industrial REIT, a Toronto-based manager and owner of more than 100 distribution and logistics properties in the U.S., by Blackstone REIT. WPT was held in two of our ABC Funds. In the United States, our top stock performers during the month included: S&P Global, Amazon, Danaher, Waste Management, Apple, NVIDIA, Alphabet, Microsoft, Facebook, and Salesforce. With four months remaining to year end we remain optimistic with regard to the economy and common stocks. Our three ABC funds remain fully invested and we expect to retain this positioning into 2022. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
July 2021 Pricing Commentary North American market indices were flat to slightly higher during the month of July with U.S. equities outperforming Canadian comparables. The three ABC Funds outperformed their respective index benchmarks during this period mainly due to four appreciating sectors comprising health care, consumer staples, technology, and industrial products. Our two top performing Canadian stock positions during July were Algonquin Power & Utilities and Brookfield Asset Management, which significantly bolstered investment returns for all three ABC portfolios. Our main U.S. equity outperformers included: Boston Scientific, Danaher, Thermo Fisher Scientific, and Zoetis in healthcare; PepsiCo and McDonalds in the consumer sectors; industrial companies Waste Management and Honeywell; and Mastercard, Visa, Google, and Microsoft in the technology sector. Looking ahead, while we anticipate periodic price volatility, we believe that common stocks remain in a primary uptrend. It is our view that occasional market sell-offs will provide attractive buying opportunities, as we contend that there are several years remaining in this secular bull market for equities. Consequently, we are maintaining our bullish equity stance and are committed to our fully invested portfolio positioning. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
