MARQUEST WEEKLY COMMENTARY – DECEMBER 14, 2015.

Liis Palmer, Cassels Investment Management Inc.

Global Balanced Fund

Last week the MSCI World Index was down 3.4 percent.  The TSX was down 4.3 percent.  The C$ was down 2.9 percent against the US$.  The price drop in oil and the spike in volatility caused investors to shift away from stocks.  The Marquest Global Balanced Fund A units closed at $17.09 compared with $17.51 the previous week.

Significant contributors to performance were Ryanair (up 3.3 percent), General Electric (up 1.4 percent) and Aetna (up 1.8 percent). Ryanair is a low cost airline providing services in the European short-haul air travel market.  November traffic stats in Europe were surprisingly strong and analysts feel that Ryanair’s earnings guidance for the year may be surpassed.

Laggards were Crescent Point Energy (down 9.0 percent), Whirlpool (down 6.7 percent) and JetBlue Airways (down 6.0 percent).  Crescent Point’s share price came down with the drop in WTI (down 10.9 percent to $35.62/barrel).  JetBlue is a low cost airline that provides upscale, coach class service primarily out of New York’s JFK Airport.  Its valuation is a reasonable 12 times earnings but November air traffic data in the US was light which put pressure on the stock price.  Management expects some short term weakness in passenger revenues.  There are concerns about less air travel in the near term however persistent low fuel prices and cost control will be positives for the company.