While the macro environment remains challenging, we continue to see opportunities in our space

The Fund was up slightly, 0.6%, outperforming the index by 1.7% in May.

We recently held a Portfolio and Investment Update webinar. Financial planners may complete a short questionnaire available HERE for CPD points.

Top Holdings (alphabetically)

Cogeco Communications

Canada

Communication Services

Cogeco Communications Inc. is a cable television operator. The Company markets basic cable television services and various discretionary services, which include pay television, audio programming, and high-speed Internet access by cable modem. Cogeco Communications serves customers throughout Canada.

Irish Continental Group PLC

Ireland

Industrials

Irish Continental Group, Public Limited Company markets holiday packages and provides passenger transport, roll-on and roll-off freight transport, and container lift-on and lift-off freight services between Ireland, the United Kingdom, and Continental Europe.

Sendas Distribuidora SA

Brazil

Consumer Staples

Sendas Distribuidora S/A distributes consumer goods. The Company provides a wide variety of foods, household products, clothes, and toiletries. Sendas Distribuidora serves customers in Brazil.

Serco Group PLC

United Kingdom

Industrials

Serco Group plc provides outsourcing services to governments, international agencies, and corporations located throughout the world. The Company manages facilities, projects, and information technology systems. Serco runs scientific establishments, provides critical information to manage traffic, maintains buildings, and operates railways.

Softchoice Corp

Canada

Information Technology

Softchoice Corporation provides information technology services. The Company offers cloud, hybrid IT, end user productivity, security, and managed services. Softchoice serves clients in Canada and the United States.

The ACWI SMID cap index was down -1.1% in May, as ongoing concerns over inflation, rising interest rates, and the war in Ukraine weighed on investors. In the US, policymakers continue to stand by their hawkish stance and foresee further rate increases to tame inflation. Inevitably, we are starting to see early signs of the U.S. economy slowing down: the PMI index fell again in May and GDP was confirmed to have contracted in the first quarter. In Europe, inflation continues its rapid rise putting more pressure on the ECB to raise rates. The UK’s inflation rate was confirmed to have reached a 40-year high in April, yet May’s expected inflation is higher still. The largest jump was from a higher level of the energy price cap. In Japan, the equity market welcomed Prime Minister Kishida’s “New Capitalism” policy (emphasizing economic growth).  The likelihood of recession is rising as central banks may struggle to tame inflation and pull off a “soft landing.”

Energy, Utilities, and Financials performed well in May while Consumer Staples and Consumer Discretionary lagged behind the overall market. While the S&P had dropped 20% for the year on May 20^th, it bounced back and ended May in the green. The US Dollar DXY index briefly gave back some strength only to climb back as of this writing. One trend that we are happy to see continuing is the MSCI Value index outperforming its Growth counterpart. While the macro environment remains challenging, we continue to see opportunities in our space: the MSCI All Country World Index ex-US is trading at an attractive 12.2x forward earnings, unchanged from April.

Stock selection drove the Fund’s overperformance against the index in May. As of May 31^st, the top ten holdings accounted for 41% of the Fund’s assets with the largest position approximately 5.9% of the portfolio.

Despite the volatility in the market, the Fund was not very active during the month.  There were no new positions added, nor did we exit any positions.   We are balancing new investments against those already in the Fund as a wide array of stocks have sold off, which creates opportunities.