Hard to believe Q3 of 2016 is in the books. . .

The Special Equity Fund was up +10.4% in the second quarter and is up +46.7% in 2016.  The third quarter provided quite a bit of volatility week to week but the final tale of the tape was surprisingly strong. It is worth highlighting that Canada has outperformed most global markets this year, with small cap stocks leading the way.

Below is a table of global equity returns.

July

August

September

YTD
JZA Special Equity Fund

+8.22%

-3.71%

+5.98%

+46.72%
S&P TSX

+3.91%

+0.27%

+1.22%

+15.83%
S&P TSX Small Cap

+5.51%

-3.55%

+3.10%

+34.29%
MSCI Emerging

+5.35%

+3.16%

+1.26%

+10.27%
DAX

+8.38%

-3.75%

-0.14%

+37.13%
S&P 500

+3.94%

+0.77%

-0.03%

+2.19%
FTSE

+3.91%

+1.52%

+0.43%

-0.62%
Shanghai

+2.08%

+3.72%

-2.54%

-21.85%

The top performing sectors were Information Technology (+12.1%), Industrials (+10.7%) and Healthcare (+9.4%), while the worst performing sectors were Real Estate (-1.5%), Materials (-1.2%) and Utilities (+0.7%). Despite the Special Equity fund’s significant overweight in Material stocks, the portfolio outperformed the TSX by +5.0% last quarter due to superior security selection (the fund’s Material stocks were up +8.6% versus the TSX Material stocks being down -1.2%).

The sector allocations of the portfolio can be seen below.

JZechner Special Equity Fund | Portfolio | Q3 2016

Sector Portfolio Benchmark +/-
Materials

48.10%

26.28%

34.44%
Information Technology

10.51%

4.48%

7.69%
Health Care

5.67%

3.99%

4.85%
Energy

22.42%

22.7%

2.37%
Consumer Staples

5.10%

3.09%

0.89%
Consumer Discretionary

3.13%

11.25%

-2.07%
Utilities

0.00%

2.76%

-2.75%
Telecom

0.00%

0.00

-5.43%
Industrials

1.55%

11.89%

-7.17%
Financials

3.52%

13.56%

-32.78%
Total

100.0%

100.0%

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