Falling oil prices and increased volatility was the theme for December. For example, the S&P/TSX Total Return Composite Index swung to a 5% decline in mid-December but ultimately rebounded and ended the month down a modest 0.4%.
The AFINA investment products performed well during the month (refer to the figures below) and the AFINA Optima10 Managed Account produced an 18.5% net return for 2014. The AFINA Affinity Fund LP had only a partial year (since October 1, 2014) and earned a return of 1.81%.
We believe volatility will continue to be prevalent in 2015. Interest rate increases in the US will likely appear in late 2015 and the result of adjusting to higher rates is typically higher volatility for capital markets, but not necessarily lower returns for equities. In Canada, we do not expect to see interest rate hikes until 2016 as lower oil prices will be a headwind for Canada versus a tailwind in the US.
|Instrument||December 2014||YTD 2014|
|AFINA Affinity Fund LP||+0.41%||+1.81%*
|AFINA Optima10 Managed Account
|Investors Group North American Fund||+0.63%||+12.17%|
|RBC Canadian Equity Mutual Fund||-0.68%||+9.20%|
|S&P/TSX Total Return Composite Index||-0.44%||+10.55%|
|S&P 500 Index (C$)||+1.39%||+24.17%|
As of December 31, 2014. All figures are net of fees and other expenses. Past performance is not indicative of future results. Annual results for the AFINA Affinity Fund LP include performance from October 1, 2014. Refer to afinacapital.com for full details and disclosures.