Most recent newsletter
Tell an
June 2006 Newsletter
Thursday, June 01, 2006
CANADIAN ADVANTAGE FUND
The Van Arbor Canadian Advantage Fund retracted 4.12% for the month of May, slightly outperforming the S&P TSX Equity Index to close at $17.15. Investors shunned the buoyant resource market pushing the TSX down 4.21% for the month. While nine of the ten industry groups in the benchmark ended the month in red, the brunt fell on the Information Technology Index which dropped over 12%. The pullback in the price of gold, accompanied by intensifying volatility in energy markets, led to a wave of uncertainty as the S&P Energy Index and the S&P Materials Index shed 5.3% and 4.0% respectfully for the month. Fears of high energy prices translating into inflationary pressures, proved to be still on the minds of policy makers which elected to raise the overnight lending rate, for the seventh time this past year, to 4.25%.
The Fund's performance resulted from a soft pullback in energy related holdings, which as a group fell 5% this past month. The exception was Enbridge Inc (ENB:TSX), which appreciated 5% this month on positive news regarding Kinder Morgan's leveraged buyout offer. Similarly, shares of the recently underperforming Canadian Tire (CTC/A:TSX), got a boost this month on favourable reviews from a large US hedge fund manager. Shares of electricity distributor, Fortis Inc (FTS:TSX) ended the month up 10% on approval of rate increases in BC and increases in Alberta's electric capacity. There were no portfolio trades to report this month.
Fund Performance Summary (Benchmark is S&P TSX Index)
US ADVANTAGE FUND
The Van Arbor US Advantage Fund ended the month down 3.40% to close at $11.52, while the broad S&P 500 Index fell 3.09% this past month. The performance of the Fund has in part been due to the lagging performance of the US large cap space, which continues to be adversely affected by inflationary pressures, rising interest rates and scepticism surrounding the future of the US economy. With the P/Es of S&P 500 companies at relative lows, there are opportunities within this market sector.
While healthcare and energy related holdings ended the month down 11% and 6% respectfully, consumer stocks such as Sysco (SYY:NYSE), Hershey Co (HSY: NYSE), and Brown Forman (BF/A:NYSE) bounced back for the month recording gains of 2.5%, 7.5% and 2.3% respectfully. Shares of Golden West Financial (GDW:NYSE) ended the month up 1.9% on positive news of a takeover offer from Wachovia Corp. The fourth biggest US bank offered to buy shares of Golden West for about $26 billion or $81 a share. Earlier in the month, the Fund sold its holdings of Stryker Corp and replaced it with Hershey Inc, a North American snack food company of chocolate and non-chocolate confectionary products.
Fund Performance Summary (Benchmark is S&P 500 Index)
EURO ADVANTAGE FUND
After a strong start this year the Van Arbor Euro Advantage Fund ended the month down 5.26% to close at $10.77, slightly outperforming the S&P Euro which shed 5.39% to close at $10.67. Of the ten industry groups in the S&P Euro Index, not one of them finished in positive territory, while the biggest losses for the month stemmed from the Industrials Index, Information Technology and the Energy Index. The three finished the month down 7.0%, 6.7% and 5.2% respectfully. The expectations of further interest rate hikes, accompanied by a pullback in energy and metal prices was the culprit for this month's performance. Of the holdings, the worst hit were Banco Pastor (PAS SM) and ERG Spa (ERG IM), which ended the month down 14% and 18% respectfully.
The top performers for the month were Metrovacesa (MVC SM) and Celesio (CLS GR) as the two ended the month up 0.9% and 0.3%. During the month, Celesio, Europe's biggest drug wholesalerwas successful at cutting costs and as a result reported a 25% increase in first quarter profit. The outlook for Celesio and other pharmaceuticals remains stable with a probability of stronger demand in the future. Throughout the month, there was no change in the Euro- Canadian exchange rate and as a result no bearing on performance. There were no portfolio trades to report.
Fund Performance Summary (Benchmark is S&P Euro Index)
Van Arbor Asset Management is an independent Asset Management company dedicated to creating wealth using a disciplined, proprietary investment strategy with an emphasis on preserving capital while generating superior long-term returns.
Click here to download a PDF
|
|
|
|
|
|
Explore
Request More Information
Attend a Meeting
Newsletter Mailing List |
Adobe Acrobat Reader or Exchange is required to view PDF documents. You may download the free document viewer (Acrobat Reader) from Adobe's web site. |
