In the month of March, we witnessed market volatility not experienced since the Financial Crisis, some 12 years ago. This volatility is largely related to uncertainty around the impact of COVID19.

 

As the virus began to make its presence known in North America, both the U.S. and Canadian governments implemented policy which has essentially shut down areas of our economy. To combat the economic shock, governments around the world have introduced various relief and stimulus measures to help offset the toll to many individuals and businesses.
 

We are monitoring government policy closely. Ideally, governments will find ways to encourage businesses to keep workers on staff - this would allow for a much smoother acceleration once the disease has faded rather than grappling with a large pool of unemployed people who will be reluctant to spend until they are matched with employers. With two trillion dollars of stimulus in the U.S. and over $80 billion of financial aid announced in Canada, we remain cautiously optimistic that these measures will provide some relief.
 

In your portfolio, we began a move towards a more defensive stance in January, taking profits on certain positions and rebalancing others back to their target weights. At the end of February, we raised cash in your portfolio by reducing exposure to international markets. To date, we have largely maintained that cash position. With the strength in the global equity markets in late March, we took the opportunity to further reduce international holdings in favor of North American companies and adding to sectors that we feel are best positioned for the period ahead, such as utility, healthcare and technology companies.
 

Based upon day-to-day news flow, we anticipate that market volatility - both up and down - will continue. That said, your portfolio is comprised of companies that will continue to generate revenues and pay dividends throughout this period.
 

Regarding the many financial and tax policy changes that have been and are yet to be announced, we will follow-up with further details on these measures in an upcoming message on the topic.
 

Of utmost importance, we wish you and your family good health during this dynamic and intense period.