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 down 0.4 percent. The Marquest Monthly Pay Fund A units closed at $4.29 compared to $4.32 the previous week.

Significant contributors in the Fund last week were West Fraser Timber (up 3.1 percent), Stantec (up 7.2 percent) and AutoCanada (up 6.9 percent). Stantec is an engineering and consulting business. The company reported Q1 ahead of consensus. They maintained their full year outlook for 2015 despite expected weakness in the Energy and Resources sector. AutoCanada is an owner of multiple car dealerships across Canada. The company reported Q1 ahead of expectations and will continue to acquire car dealers and consolidate the dealer network. It is the only publicly traded auto dealer group in Canada and has a 2.4 percent market share in new car sales so there is plenty of room to grow as independent dealers seek to exit the business in the next few years.

Laggards were CN Rail (down 4.8 percent), CP Rail (down 5.5 percent) and Teck Resources (down 8.0 percent). The rails have been trading lower on expectations that energy related carload volumes will be lighter than anticipated. At 15.6x and 16.7x, both CN and CP are trading at lower P/E ratios relative to the S&P than their 5 and 10 year averages.

Global Balanced Fund

Last week, the MSCI World Index was up 0.7 percent. The C$ was up 0.5 percent against the US$. The Marquest Global Balanced Fund A units closed at $18.23 compared with $18.30 the previous week. US economic data releases continued to disappoint investors (PPI numbers, Retail Sales, Consumer Confidence, Industrial Production numbers, etc.) prompting concerns that Q1 weakness was not just temporary. At the same time, European economic data has been improving.

Significant contributors to performance were Canada dollar futures (our hedge against a rising C$), United Health (up 2.4 percent) and Roche (up 3.6 percent). Roche published promising data on phase II trials for alectinib, a potential 2016 blockbuster drug in immuno-oncology. Roche is a leader in innovations in this area which involves boosting the body’s immune system to hunt and destroy cancer cells.

Laggards were Comcast (down 3.8 percent), Magna (down 2.5 percent) and Berry Plastics (a bond) (down 3.9 percent).

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