July 2018 Investment Performance

July 2018 Investment Performance

Equities continued to recover from the March lows. The AFINA actively-managed products had another solid month. Our top performers in July were Biogen (BIIB), H&R Block (HRB) and The Walt Disney Company (DIS). An overview of the performance of our actively-managed products is as follows:

  • The AFINA Optima10 was up +2.6% in July. The Optima10 has a 5% cash weighting and a 3.2% dividend yield.
  • The AFINA Affinity was up +3.5% in July. The Affinity has a 7% cash weighting and a 2.4% dividend yield.

Instruments (% return) July 2018 2018 2017 2016
AFINA Affinity 3.5 5.6 2.1 20.6
AFINA Optima10 2.6 2.3 3.3 23.9
Benchmark (1) 1.9 6.9 11.4 14.8

As of July 31, 2018. All figures are net of fees and other expenses. Past performance is not indicative of future results. Refer to https://www.afinacapital.com/legal/ for full details and disclosures.
(1) The benchmark represents a 50% weighting of the S&P 500 Total Return Index in Canadian dollars and a 50% weighting of the S&P/TSX Composite Total Return Index in Canadian dollars.

 

 

Monitoring the US yield curve for recession signs. While valuations are reasonable following the Q1/2018 correction, we continue to monitor the yield curve and specifically the 10-year versus 2-year US Treasury Yield Spread (see below). The shaded areas on the chart below represent US recessions. When the yield spread dips below 0% and short-term interest rates move higher than long-term rates (commonly known as an inverted yield curve), it is an excellent predictor of a bear market and US recession. We are not there yet and will continue to monitor this important leading indicator of economic activity.

10-2 Year Treasury Yield Spread Chart

10-2 Year Treasury Yield Spread data by YCharts