Second Quarter 2015 Review

Canadian Equity
The Canadian stock market, represented by the S&P/TSX Composite, was down 1.6% in the second quarter of 2015. The two worst performing sectors were the industrials (-9.5%) and utilities (-7.7%) sectors. The industrials sector was negatively impacted by the weak performing transportation sub-sector due to the rising price of oil. The utilities sector suffered due to the increase in interest rates. For the second quarter in a row, the health care sector performed the best, up 9.1%. Small-cap stocks outperformed large cap stocks for the first time in a year.

Global Equity
Global equities delivered a slightly weaker performance for the quarter, in large part due to the market sell-off that occurred in the last few days of June. The MSCI World Index was down 0.9%. On a regional basis, developed markets in the Pacific region did best while European equity markets fell during the end of the quarter. The MSCI EAFE Index suffered a 0.6% loss, faring better than the S&P 500 Index, which was down by 1.4%. The MSCI Emerging Markets Index matched the MSCI EAFE Index return of -0.6%. On a sector basis, telecom services, financials, health care and consumer discretionary outperformed while utilities, consumer staples and materials underperformed the index.

Fixed Income
The Bank of Canada maintained their overnight lending rate at 0.75%, reaffirming that they will continue to closely monitor economic conditions. The FTSE TMX Canada Universe Bond Index declined 1.7% for the quarter. Shorter-term maturities did better than longer-term issues, resulting in a significant steepening of the yield curve. Corporate and federal bonds outperformed the broader markets while provincials and municipals underperformed.