Most recent newsletter
Tell an
September 2007 Newsletter
Saturday, September 01, 2007
CANADIAN ADVANTAGE FUND
The Van Arbor Canadian Advantage Fund ended the month down 1.8%, while the S&P TSX Index fell 1.2%. Volatility in equity markets picked up last month as Canadian equities fell sharply at the beginning of the month only to pare their losses in the last two weeks of trading. The market correction hit energy and material stocks the most as investors began to reduce their appetite for risk and digested the possibility of a slowdown in global commodity demand. The uncertainty clouding Canadian financials began to clear as most financial related companies revealed small exposures to US sub prime lending. The credit market was given a boost in confidence by the injection of liquidity from central banks around the world. Overall, the Canadian economic landscape remains fundamentally strong with GDP growth and labour market data reinforcing expectations. Earnings continued to beat expectations this month with positive results from Manulife Financial and consumer staples retailer Alimentation Couche-Tard, which saw earnings rise 18% and 27% respectively.
US ADVANTAGE FUND
The Van Arbor US Advantage Fund soared 4.7% last month, while the S&P 500 index was up 1.3%. August saw most of our holdings benefit from a flight to quality as investors shunned riskier assets and bought up quality stocks. Our concentration in diversified blue-chip companies looks more attractive in the current environment as shares of Procter & Gamble, PepsiCo and Johnson & Johnson all saw solid gains. Our positions in financial companies also saw a strong rebound as some of the large banks were left severely undervalued. The Federal Reserve re-iterated its view of moderate economic growth but now seems to be open to reducing interest rates to calm equity and credit markets. The main theme towards the end of the month was a gradual improvement in investor confidence as the Fed and US government seemed willing to stave off a credit crunch that could spillover into the broader economy. This month saw shares of Wells Fargo (WFC) and AllState Insurance (ALL) sold while positions were made in FedEx Corp (FDX) and Thermo Fisher Scientific (TMO).
EURO ADVANTAGE FUND
The Van Arbor Euro Advantage Fund fell 3.5% last month, while the S&P Euro Index was down 2%. Stocks fell sharply in the first half of August as European markets digested the effects of credit weakness in debt markets. Equities went on to recover steadily afterwards with nine out of the last ten trading days ending on the positive side. The recent correction has created quiet attractive valuations given the economic fundamentals of the Euro region. The European Central Banks injection of liquidity helped alleviate fears of a credit crunch while a postponement of interest increases seems evident. The Canadian currency appreciation versus the Euro contributed one percent to the decline; however, after its rapid rise it has begun to stabilize. A small number of companies reported earnings in August with German utility RWE AG and Industrial BASF AG reporting 73% and 14% earnings growth.
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. |
