COMMENTARY

- THE DELBROOK PERSPECTIVE -

October 2016 Review

The Delbrook Resource Opportunities Fund held its ground in October, returning -1.4% versus benchmarks results of the TSX Venture Index -3.4% and the S&P Metals and Mining ETF -4.1%. This brings the Fund’s compound annual return since inception to +22.0% vs. a benchmark return of -5.0%.  

The Fund’s October performance benefited from our decision to maintain defensive asset allocation. Given the market’s overall lack of conviction, characterized by each rally and pullback being short lived and highly reactive to the next piece on information from US pollsters or CNN headlines, we successfully resisted the urge to chase after short-term momentum trades. As such, we continue to insist that our  investment decisions are supported by fundamental analysis. Therefore, while asset allocation certainly supported the Fund’s returns in October, the strong performance of a number of our short positions had an even greater impact on our results.
OCTOBER 2016
YTD
INCEPTION
DELBROOK RESOURCE FUND
-1.4%
130.1%
74.1%
Indices
S&P TSX Materials Index
S&P TSX Energy Index
S&P TSX Venture Index
S&P Global Mining Index
S&P Metals & Mining ETF
CBOE VIX Index
-1.0%
0.8%
-3.4%
-0.5%
-4.1%
-1.0%
47.2%
24.5%
47.0%
45.8%
​69.1%
-6.3%
13.1%
-12.0%
-13.2%
-5.9%
-34.9%
6.4%
Commodities
Bloomberg Commodity Index
Gold - (US$) Spot
Silver - (US$) Spot
WTI Crude - (US$) Nov 16
-0.5%
-2.9%
-6.6%
-4.0%
8.1%
20.4%
29.3%
26.5%
-32.8%
2.9%
-10.4%
-43.3%
Going into November, the Fund took a defensive stance and reduced the majority its short positions. Overall, portfolio exposure heading into the US presidential election was relatively neutral, which helped the Fund perform ahead of benchmarks. In our opinion, the immediate spike in bond yields and strength of the US dollar in reaction to a Trump victory looks over extended and should moderate. The market fundamentals are unchanged in our view: global growth is slow, yields are still well below historic levels, and geopolitical uncertainly are becoming a permanent investment backdrop of this decade. (Cont...)

​Please continue to view our full October 2016 Commentary Newsletter by downloading the following PDF file​:
Matthew Zabloski

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Delbrook is pleased to provide you with an archive of our previously published monthly Newsletters. Click any of the below files provided in Adobe Acrobat (.pdf) file format:
SEPTEMBER 2016
The Delbrook Perspective
AUGUST 2016
The Delbrook Perspective
JULY 2016
The Delbrook Perspective