There are other investment offerings in Canada that fall under Socially Responsible Investment (SRI) or Environmentally Friendly platforms, primarily, these are based on an initial negative screening process to eliminate companies operating in morally distasteful industries (ie. tobacco, gambling, nuclear), followed by a relative screening to then select the companies that score in the top 50% of their peers on broad environmental, social and governance (ESG) measures. Very little company specific research is involved. Rather than having major (top-10) holdings in Suncor Energy and Canadian Natural Resources, both found as of July 31, 2016 in a well-known competitor’s portfolio that uses ‘more than 100 indicators for environmental, social and governance performance’, the EcoPortfolios Pure Green Portfolio counts leading renewable energy companies as top-10 holdings.

With my EcoPortfolios offering, traditional financial research is used, but I also consider extra financial factors such as carbon emissions, water usage, and corporate sustainability goals. These data, along with a diligent review of public company documents, such as sustainability reports, annual reports or management circulars leads to the inclusion or exclusion of candidate companies. 

September 2017 Commentary

September finished with 5 record-high closes for the S&P 500 over the course of final week of the month. Historical patterns lean in favour of a pullback from here, but the bull market sentiment, while on the bullish side of neutral, does not appear to be stretched. Coupled with the low odds of a US recession, this would suggest that a market downturn, should one occur, would likely be shallow and short in duration. For this reason, the cash level in the portfolio continues to hover at just one percent.

In Canada, however, with the Bank of Canada moving aggressively on interest rates, and the Canadian economy having lost 88,000 jobs last month, not to mention continued low oil prices and unthinkably high personal debt ratios, we remain at risk of a housing/debt/construction fueled market correction.

This month, no changes were made to the Pure Green portfolio. However, the August increase to our Siemens position proved fruitful as it was the top performer in the portfolio, up nearly 8% this month. A secondary share offering by Pattern Energy led to a modest share price decline, but ultimately should boost future profits as they are now capitalized for more dropdown acquisitions of “right of first offer” projects from their parent company, Pattern Development.


Previous Months Commentary

This report is for information purposes only and the performance numbers have not been audited. All performance data represents past performance and is not indicative of future performance. All rates, yields and prices are quoted as of June 30, 2017. The author has taken all usual and reasonable precautions to determine that the information contained in this report has been obtained from sources believed to be reliable and that the procedures used to summarize such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor Scotia Capital Inc. (SCI) can make any warranty as to the accuracy or completeness of information, analysis or views contained in this report. SCI and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this report in contravention of this notice.

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