We have now passed the one-year mark since the COVID-19 pandemic started and what a year it has been. It was certainly a challenging year on many fronts but also brought about some exciting opportunities.
At Anchor Pacific, we are cautiously optimistic that with the vaccine rollout well underway, it seems that loosening restrictions and an economic reopening is not far off. We are very much looking forward to having the opportunity one day soon to return to face-to-face interactions with our friends, colleagues and clients.
One theme dominated market trends in the first quarter of 2021 – a change in leadership.
With hopes for progress against COVID-19 leading to optimism about the economic rebound and recovery, struggling investment classes and sectors turned in strong performances. At the same time, the corners of the markets that had been hot – in some cases for years – turned cold.
Laggard value stocks leapt to the lead, richly valued growth stocks faded, energy stocks bested all other sectors, and technology stocks landed in the unusual position of worst performers. Smaller companies more likely to have their fortunes tied to the strength of the U.S. economy were among the best performers.
In the bond market, dormant expectations for inflation began to emerge, and yields began to rise leading to a decline in prices and, in some cases, wiping out multiple years of income returns.
While it may sound like a broken record, risk management does and will always matter. With market volatility expected to remain high, it is undeniably the most important consideration in creating a proper foundation for wealth management and goal realization.
The path to realizing one’s financial goals rests on the realization of predictable and reliable returns. Failing to properly structure one’s investment program to minimize large drawdowns, which are the biggest detractor to compounding wealth, is likely to have serious consequences.
The single biggest question for investors in 2021 and beyond will be how one successfully navigates the markets in order to make an acceptable long-term rate of return.
We would like to thank you for your continued support and trust that you have placed upon us in being stewards of your capital. With challenges come growth and new opportunities and we are excited for the year ahead.
January 1, 2021 to March 31, 2021
North American Equity Markets
Canada: TSX composite +8.11%, TSX 60 +8.93%, TSX Small Cap +9.80%
US: Total Market +6.54%, S&P 500 +6.35%, S&P 500 (C$) +4.82%, Russell 2000 +12.90%, Dow Industrials +8.45%, NASDAQ 100 +1.85%
International Equity Markets
EAFE Developed: FTSE EAFE +4.51%, FTSE Europe +5.03%, FTSE Asia Pacific +2.79%
Emerging: FTSE +4.01%
Canada: Total Market -5.24%, IG Credit -3.82%
US: Total Market -3.37%, Short Govt -0.09%, Medium Govt -5.73%, Long Govt -13.92%, IG Credit -5.47%, High Yield +0.62%
USD Index +3.63%, CAD +1.10%, Yen -6.89%, Euro -4.24%
Broad Index +13.30%, Gold -10.32%
Global Equity Market Valuations – Valuations and Total Risk Returns:
(Source – iShares US, Blackrock, Research Affiliates, Portfolio Visualizer, etfdb.com, Yahoo Finance, Anchor Pacific)
Global Equity Market Valuations – Price Earnings Ratios:
(Source – iShares US, Blackrock, Research Affiliates)
Download the complete First Quarter Market Commentary & Performance:
Anchor Pacific Investment Management Corp. (“Anchor Pacific”) is a Vancouver, BC-based portfolio management firm, which leverages process, technology, and infrastructure to democratize the process of managing endowment and pension style investment portfolios to deliver innovative, high-touch, and transparent investment programs across the full spectrum of asset owners and investment consumers.