MARQUEST MONTHLY PAY FUND UPDATE – MAY 23, 2014
Liis Palmer, Cassels Investment Management Inc.
Last week the Marquest Monthly Pay Fund (A units) closed at $5.40, up from $5.34 the previous week. The TSX returned 1.3 percent in the same period. The first two Canadian banks have reported strong Q2 earnings. European parliamentary elections showed signs of stability in Italy and Germany.
Leading contributors in the portfolio were TD Bank (up 3.5 percent), RBC (up 3.3 percent) and CIBC (up 2.4 percent). TD reported a 16 percent profit increase for Q2. The Aeroplan credit card portfolio acquisition, Epoch Investments acquisition and strong business lending results offset weakness in mortgage growth. Real estate secured lending grew 4 percent in the quarter. RBC reported a 15 percent profit increase for Q2. Net income from wealth management and capital markets was up 25 percent and 32 percent, respectively.
Laggards in the portfolio were West Fraser Timber (down 2.3 percent), Cineplex (down 1.1 percent) and Power Financial (down 1.3 percent). West Fraser’s stock price was affected by a drop in lumber prices. In April, industry shipments to China were 1.7 percent lower than a year ago, North American volumes were down 2.8 percent and Western European volumes were down 0.6 percent. Softwood prices were weaker in China and China is typically a leading indicator for North American prices.
The information above is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this paper are derived from proprietary and non-proprietary sources deemed by the author to be reliable. The information is not necessarily all-inclusive and is not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any way for errors and omissions is accepted by Marquest, its officers, employees or agents. This paper may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement contained herein. All forward-looking statements are subject to change and are provided in good faith but without legal responsibility. © 2014 Marquest Asset Management Inc. All rights reserved.