Posted by John Kim
The markets received a big boost on Friday, with news out of the Peoples Bank of China that it had lowered the 1 year lending rate by 40bps to 5.6% (the first rate cut since July 2012). This news certainly helped risk assets, especially the beleaguered resource sector. But the question remains: is this sustainable? The answer will likely come this Thursday at the OPEC meeting where members will discuss possibly cutting production in order to support oil prices. There has been increased speculation recently surrounding whether the Saudis will support a cut in oil prices or allow prices to stay low.
On the North American front, last week saw the resurgence of the resource sector with Materials, primarily Gold, and Energy, pushing the TSX up by 1.8%. Gold remains the safety trade driving the TSX The story was similar in the U.S., where Materials and Energy helped the S&P 500 gain 1.2% for the week.
Posted by Andrew Hamlin & Vivian LoWe thought it would be constructive to share our high-level thoughts on the markets as we head into year-end. Below is our current outlook:
The macro data coming out of the U.S. signals that the economy remains strong; job openings and labour turn over (JOLTS Report) is at a 13 year high and “voluntary separations” (quitting your job to find another job) is at 60% indicating confidence in the U.S. employment market. In addition, as oil prices drop, consumers directly benefit. Considering that 70% of GDP in the U.S. is consumer-based, this can be very positive for the economy. To put it into perspective, a savings of 1 cent at the pump equals a billion dollars added back into consumers’ pockets and gas prices have moved on average 50 cents – that is $50bn savings! We view this as a significant embedded stimulus and we continue looking at retailer and restaurant stocks as two industries that will directly benefit from lower gasoline prices. In terms of a possible stock market derailment, while valuation might be stretched as we reach all-time highs in the U.S. market, some investors are looking to raise cash and lock in their gains as we approach year-end, so we could see minor pullbacks. While we don’t see this being too much of an issue longer term, we’ve positioned the Aston Hill Growth & Income Fund relatively defensively in case this scenario plays out.
Posted by Aston Hill Sales & Marketing Team
The Aston Hill Growth & Income Fund is the proud recipient of the 2014 Lipper Award for Best Fund over 3 Years: Alternative Strategies. The award recognizes Portfolio Managers Andrew Hamlin and Vivian Lo’s continued commitment to active management. The Aston Hill Growth & Income Fund is a balanced fund that utilizes alternative strategies to generate low volatility returns. Such alternative strategies allow the managers to go beyond traditional long-only portfolio management using additional tools such as short-selling and derivatives including options strategies (puts/calls). Their management style offers clients the potential for enhanced downside protection during times of market volatility while still participating in market gains.
Also referred to as ‘Liquid Alternatives’ these alternative investment strategies are a principle theme across Aston Hill’s suite of mutual fund products. Click here to learn more about the Aston Hill Growth & Income Fund and visit our Liquid Alternative Education Centre to learn more about this rapidly growing asset class.
Posted by Joanne Hruska & Carol Pretty
A lot is being read into recent changes in Saudi OSPs (Official Selling Prices) for Arab Light Crude but a look at the context of these changes brings conclusions about a price war with the U.S. into question.
History shows that OSPs are a response to market dynamics and regional pricing. A response. This means they are a product of demand and not a determinant.
With rising freight rates to Asia that need to be offset as well as increased competition from Atlantic crudes, a decrease in Saudi OSPs to Asia does not seem extraordinary especially given that these OSPs have since rebounded $0.95 for December. Likewise with OSPs for Arab light to the U.S. at multi-decade highs a small decrease does not seem extraordinary either especially given reduced U.S. demand for light crude imports.
Posted by Aston Hill Capital Markets Inc.
Aston Hill Capital Markets Inc. has recently filed a Notice of Meeting and Information Circular for the Special Meeting of Unitholders of the North American Financials Capital Securities Trust. It is being mailed out to all unitholders in the Fund. The Circular contains all of the information regarding the Special Meeting and what needs to be done in order for an investor to vote their units. We have chosen to ask unitholders to extend the Fund for a variety of reasons (some listed below) but the primary reason is that Aston Hill Capital Markets has received a lot of positive feedback from our clients about the Fund and their desire for it to continue.
The Connor Clark & Lunn Investment Management fixed income team has done a very good job, producing good results and making some very good macro calls. For example, they had done their research and were able to trade out of the Tier 1 notes that had a regulatory par call feature long before the market realised the issue. By doing so, the Fund missed the significant move down in those notes. The Class A units have an annualized return since inception of 9.23%* which compares quite favourably to the FTSE TMX Canada Universe Bond Index at 5.26% over the same time period.
The Aston Hill Credit Opportunities Fund is generally available to investors that can meet a certain minimum amount of money to invest. The minimum initial investment for residents in any province or territory in accordance with applicable securities laws is set out below:
All provinces and territories $125,000 or $25,000(1)
BC, NB, NS and NL Only: $5,000(2)
(1) A minimum purchase of $25,000 is available to residents who meet certain requirements.
(2) A minimum purchase of $5,000 is available to residents who meet certain requirements and reside in BC, NB, NS and NL by way of the prescribed OM.
Investors should contact their investment dealer or Financial Advisor for more information.
If you can comfortably invest the minimum dollar amount required in your province or territory, please accept the disclaimer below to learn more about the AHF Credit Opportunities Fund.
Disclaimer: Information pertaining to AHF Credit Opportunities Fund is not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of units in the AHF Credit Opportunities Fund is made pursuant to its offering memorandum only to those investors in jurisdictions of Canada who meet certain eligibility requirements. Please read the offering memorandum carefully before investing.
The Aston Hill Opportunities Fund is generally available to investors that can meet a certain minimum amount of money to invest. The minimum initial investment for residents in any province or territory in accordance with applicable securities laws is set out below:
All provinces and territories $150,000 or $5,000(1)
(1) A minimum purchase of $5,000 is available to residents who meet certain requirements. Investors should contact their investment dealer or Financial Advisor for more information.
If you can comfortably invest the minimum dollar amount required in your province or territory, please accept the disclaimer below to learn more about the Aston Hill Opportunities Fund.
Disclaimer: Information pertaining to Aston Hill Opportunities Fund is not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of units in the Aston Hill Opportunities Fund is made pursuant to its offering memorandum only to those investors in jurisdictions of Canada who meet certain eligibility requirements. Please read the offering memorandum carefully before investing.
Nov 25, 2014 16:09 EST