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MARQUEST WEEKLY COMMENTARY – SEPTEMBER 22,2015

MARQUEST WEEKLY COMMENTARY – SEPTEMBER 22,2015

Liis Palmer, Cassels Investment Management Inc.

Monthly Pay Fund

Last week the TSX was up 1.4 percent. The Marquest Monthly Pay Fund A units closed at $3.60 compared to $3.60 the previous week. Valeant Pharmaceuticals was the biggest positive influence on the market. It was up 7 percent and is almost 6 percent of the TSX. We have a small position in Valeant. It does not have a dividend.

Significant contributors in the Fund last week were Transcontinental (up 9.3 percent) and Arc Resources (up 6.3 percent) and Algonquin Power (up 3.6 percent). Transcontinental is a printing and publishing company and reported Q3 well ahead of consensus. The company secured new packaging and print contracts worth $30 million annually. Flyer printing has shown resiliency and packaging is growing. It trades at about 7 times earnings. We have held it for some time. Algonquin Power traded up with all utilities after the US Federal Reserve announced that it would not raise interest rates for the time being.

Wells Fargo (down 3.6 percent), Cameco (down 2.7 percent) and West Fraser Timber (down 4.9 percent) were last week’s laggards. Wells Fargo traded down with the US banks on the Fed announcement.

Global Balanced Fund

Last week the MSCI World Index was up 0.2 percent. The C$ was up 0.3 percent against the US$. The Marquest Global Balanced Fund A units closed at $17.34 compared with $17.54 the previous week. The US Federal Reserve’s decision not to increase interest rates surprisingly caused a negative reaction in markets. The Fed voiced concerns regarding the deflationary pressures coming from China which caused investors to be cautious that China’s economic growth was slowing more rapidly than had been estimated.

Significant contributors to performance were United Health (up 2.9 percent) and Alaris Royalty (up 6.9 percent) and Vermillion Energy (up 3.3 percent).

Laggards were Wells Fargo (down 3.3 percent), UBS (down 7.6 percent) and CVS Health (down 2.7 percent). The share prices of banks fell with the announcement of the Fed’s decision.

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