Skip to main content

A Balance Of Risks: MD’s Portfolio Positioning Outlined On BNN

We saw the U.S. markets close out the second quarter with another set of positive results, up 6.01% for the quarter (in Canadian dollar terms) and 19.17% year-to-date. Canadian markets, in contrast, lagged somewhat―with returns over the quarter at 4.87% and 2.45% year-to-date. International markets produced returns of 1.27% for the quarter (in Canadian dollar terms) and 8.11% year-to-date.

These results are seen against a backdrop of larger trends in global financial markets—and at MD, we position investment assets tactically to align with our forward-looking view of how these trends may play out over the next six to 24 months.

In late June, I appeared on BNN’s Market Sense [info and video] to discuss how MD’s tactical asset allocation process is used to both look for return and manage risk in MD funds and pools.

As discussed in that interview, our most recent tactical decision, implemented in June, reduces holdings in equity and shifts allocation in the portfolios away from short-term fixed income and towards longer-term fixed income.

These tactical shifts have brought our portfolios closer to the strategic asset allocation than their previous positions. This repositioning corresponds with our view that markets are slowly normalizing over time, even though shorter-term volatility may still occur―as we saw following the June announcement by Federal Reserve Board Chairman Ben Bernanke.

As an MD investor, you can be confident that our view and our approach are holistic, and our attention to the balance of opportunity and risk has been finely honed over time. If you would like to discuss how MD’s tactical asset allocation decisions are designed to deliver benefits to our investors, I encourage you to reach out to your MD Advisor.

William R. Horton, Jr., CFA
Chief Investment Officer
MD Financial Management Inc.