Q1 17 Market Review

Canadian Equities

  • Canadian equities were up this quarter, gaining 2.4%.
  • The utilities, consumer discretionary and information technology sectors led the S&P/TSX Composite Index this quarter.
  • The energy and health care sectors were the only components within Canadian equities that had negative returns. The health care sector was the largest detractor to the Index for the second quarter in a row.
  • International Equities

  • World markets, represented by the MSCI World Index (C$), and the U.S. market represented by the S&P 500 (C$) were up 5.9% and 5.2% respectively for the quarter.
  • The MSCI EAFE Index (C$) was up 6.8% for the quarter.
  • The MSCI Emerging Markets ($C) Index was also up for the quarter, achieving a return of 10.9%.
  • Global equities and Emerging Market equities generated positive local currency returns for the quarter. Global monetary policy has continued to be accommodative, aiding global equity and Emerging Market returns.
  • Canadian Fixed Income

  • The gap between Canadian and U.S. interest rates widened this quarter, as Canadian rates decreased by approximately three basis points across the curve and nine basis points for 10-year government of Canada bonds. U.S. rates remained relatively unchanged.

  • The Bank of Canada left its overnight rate unchanged at 0.50% during the first quarter.
  • The Federal Open Market Committee hiked the federal funds target rate by 0.25% based on improving labour markets and increasing inflation.
  • The FTSE TMX Canada Universe Bond Index was up 1.2% for the quarter.
  • Corporate, Provincial and Municipal bonds outperformed the index for the quarter while Federal bonds underperformed.