September 2021 Portfolio Management Team Update

Elvis Picardo

September 15, 2021

Market & Economic Environment

As global equities continued to advance in August, year-to-date gains for many major indices around the world ranged from 18% to 20%. The TSX rose 1.5% last month, bringing its year-to-date gain to 18.1%. Most groups in the index rose, led by information technology, communication services and industrials, while decliners were led by the materials, consumer discretionary and energy sectors.

U.S. indices also gained in August, with the S&P 500 up 2.9% for a YTD gain of 20.4%. The Dow Jones Industrial Average rose 1.2% and the Nasdaq Composite surged 4.0%, for YTD gains of 15.5% and 18.4% respectively. The Russell 2000 index of U.S. small-cap companies rose 2.1% in August, compared with a gain of 2.8% for the large-cap Russell 1000. Small-cap stocks had outperformed large-cap stocks significantly in the first half of 2021 but have underperformed so far in the second half, as a result of which the Russell 2000 is up 15.1% for the year while the Russell 1000 has gained 19.6%.

(Data Source: FactSet)

Our Strategy

The steady upward trend in markets can be gauged by the fact that the S&P 500 has not had a 5% pullback since the last week of October 2020. Although negative news such as the continued spread of the delta variant and the U.S. withdrawal from Afghanistan continue to occupy headlines, investors have focused on market-supportive factors such as strong corporate earnings and ongoing central banks’ stimulus to push indices higher.

The Portfolio Management Team (PMT) has not made any changes to client portfolios recently but remains vigilant about the elevated prospects for a significant pullback in the historically volatile months of September and October. The PMT expects to continue with its strategy of buying market dips as they occur, in anticipation of a strong finish to 2021.

Please contact any member of the PMT if you have any questions or concerns regarding your accounts.