I am an accredited or eligible investor as defined in National Instrument 45-106.




Liis Palmer, Cassels Investment Management Inc.

Monthly Pay Fund

Last week the TSX was up 0.3 percent. WTI Crude Oil was up 2.5 percent. The rebound from a six year low in oil prices has been supported by the significant drop in US drilling activity. However, supplies have reached 88 percent storage capacity. NYMEX natural gas futures were down 3.9 percent. The Bank of Canada said Canada’s economy will start to show more positive effects from lower oil prices from the second quarter onward. The Marquest Monthly Pay Fund A units closed at $4.47 compared to $4.45 the previous week.

Significant contributors in the Fund last week were Restaurant Brands (up 11.4 percent), Cameco (up 2.3 percent) and West Fraser Timber (up 1.5 percent). Restaurant Brands reported an inline quarter. It was hurt by a strong US$ but sames store sales at Tim Hortons were up 5.3 percent and 4.6 percent at Burger King. West Fraser reported a strong Q1, beating estimates.

Laggards were Pulte Homes (down 9.9 percent), Brookfield Asset Management (down 3.6 percent) and Transforce (down 5.0 percent). Transforce reported a weak Q1. All growth in revenue was from acquisitions. There was weakness in retail, construction activity and rig moving as well as tough weather. We have sold the Transforce.

Global Balanced Fund

Last week, the MSCI World Index was up 1.7 percent. The C$ was up 0.5 percent against the US$. In spite of the negative currency pressure, the Marquest Global Balanced Fund A units closed at $18.51 compared with $18.43 the previous week. US economic data has been soft lately, durable goods orders rose 4 percent in March but non-defence goods shipments fell 0.4 percent. In response to signs of slowing growth in China, the PBOC lowered the reserve ratio requirement for banks by 1 percent. Eurozone PMI data was also disappointing.

Last week in the global equities portion of the portfolio, leading contributors were Whirlpool (up 2.9 percent), Roche (up 4.4 percent) and Walt Disney (up 2.0 percent). Whirlpool rebounded from the price weakness in the previous week.

Laggards were Pulte Homes (down 9.9 percent), Tata Motors (down 3.4 percent) and Magna (down 2.9 percent). Pulte Homes reported a weak Q1 due to construction delays and other issues. However, they repurchased $100 million of stock and have $1 billion cash. They are seeing a strong start to the spring selling season and expect a long, gradual economic recovery in the US. Management talked about improving demand conditions due to low interest rates and easing credit standards, a better job market in the US as well as peak rental prices. A low housing inventory is another favourable factor. Pulte is a national homebuilder in the US with inventory across demographic lines and a disciplined approach to capital allocation.

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