Anthony Layton MBA, CIM

Chairman & CEO, Portfolio Manager

Peter Guay MBA, CFA

Portfolio Manager
  • T514.875.7566 x 224
  • 1.800.875.7566
  • F514.875.9611
  • Place Alexis Nihon
  • 3400 de Maisonneuve Ouest,
    Suite 1501
  • Montreal, Quebec H3Z 3B8

2011 Year in Review – Bright spots in turbulent markets

January 16, 2012 - 0 comments

Markets have come through a turbulent year, marked by an earthquake and tsunami in Japan, uprisings in the Arab world and European debt concerns. Despite all these events, there were some bright spots that mitigated the difficult equity market performances. Here’s a review of the major asset class results for 2011.

Fixed Income: Canadian DEX Short Term Bond Index = 4.7%, Canadian DEX Bond Universe = +9.7

  • With continued decline in government and long-term bond yields, bond performances were strong again in 2011 (when bond yields go down, prices go up). US 10 Year Treasury bonds ended the year yielding an all-time low 1.88%.

Other Income: S&P/TSX Canadian REITs Index = +23.5%, Barclays Capital High Yield Bond Index = +7.6% in CAD

  • The Real Estate Income Trust and Power Utilities markets both had strong years, seeing increased demand for high yielding income investments. The High Yield Bond market in the US saw a more normal year, with upside from yield compression (see above) offsetting downside from increased credit risk due to turbulent markets.

Canadian Equity: S&P/TSX Capped Composite = -8.7%

  • With reduced demand from China for Canadian commodities and difficulties among Canada’s largest insurance companies.

US Equity: S&P500 Index = +4.5% in CAD

  • Despite the debt ceiling negotiations and election preparations, the US economy continues to exceed expectations. Jobs are being created, albeit slowly, and economic growth is slow, but better than predicted. The biggest contributors to the US market performance were the Health Care (+12.3%) and Consumer Staples (+13.9%) sectors. Value stocks and Small Cap stocks both underperformed while the rise in the USD contributed a 2.5% currency premium to Canadian investors.

International Equity: MSCI EAFE Index = -9.66% in CAD, MSCI Emerging Market Index = -16.25% in CAD

  • The earthquake in Japan early in the year and the concerns over the European periphery country’s ability to pay their debts weighed heavily on international markets. The major Emerging market countries (China, India) also had difficult years as their respective central banks tried to restrain inflationary growth by increasing interest rates and reducing liquidity.

PWL Market Stats, as at December 31, 2011


As always, don’t hesitate to contact us if you’d like to discuss.

Best regards and Happy New Year!
Tony & Peter

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