Each quarter, Bâtirente’s Investment Strategy Manager, Jean-François Dumais*, shares with you our funds’ performance results and offers his comments regarding financial markets.
In this issue, we look back on Q1 2022.
We’ve had a rather difficult start to the year—what are the repercussions for financial markets?
Given the current economic climate, it’s not surprising that the first quarter was especially tough for financial markets. We experienced strong inflation mainly due to the pandemic, which is still with us, as well as the war in Ukraine. In Canada, this inflation has even peaked at a level not yet seen in the past 30 years.
What’s the impact of this situation on Bâtirente’s Diversified Funds?
Our funds posted negative returns in Q1, between -5.5% and -3.3%, depending on their risk profile.
How do you explain the negative returns for these Funds?
This can be attributed to the results of the asset classes that constitute these funds. Bâtirente’s Global Equity Multi Fund had a total return of -8.9%, while our Global Small Cap Equity Multi Fund performance was -9.7%.
Still, it’s worth noting that Bâtirente’s Canadian Equity Multi Fund made up for this, thanks to a positive return of 5.4%. The reason for that yield was the significant presence of oil, mining and financial stocks that were highly sought after by investors in this inflationary context.
It’s often said that in periods of volatility, one should stay the course and look to the long term?
Indeed, it’s important to stay focused on the future! For example, over the past 10 years, Bâtirente Diversified Funds have produced annualized yields varying between 4.3% and 9.3%—well above the inflation rate recorded for that same period.
How have other asset classes performed?
The ESG-listed real assets portfolio (i.e., related to environmental, social and governance issues) saw a negative return of only 1.2%. This portfolio includes securities associated with the real estate and infrastructure sectors, and that portion generated a positive return.
As for fixed income funds, these posted a negative return. The dramatic increase in interest rates contributed to the Bâtirente Treasury Multi Fund’s -2.6% performance and the -5.1% return for Bâtirente’s Bond Multi Fund. However, the relative performance of these funds was still excellent mainly because of the shorter term (or maturity) involved, which is profitable in an inflationary context. A shorter term is generally advantageous when interest rates go up. One of our goals is to preserve and protect our members’ assets during downturns.
To learn more about Bâtirente Funds and get updated performance information, see the Bâtirente Funds of our website.
*Jean-François Dumais has worked as an Investment Strategy Manager at Bâtirente since 2019. He holds a Master of Business Administration (MBA) in finance. He has nearly 18 years’ experience in financial markets.
First of all, what is RI? RI is about integrating environmental, social and governance factors, or ESG criteria, into the choice and management of investments in which your savings are placed—without neglecting performance!
How do ESG factors get integrated? To help bring about sustainable development, RI relies on a number of strategies aimed at changing the behaviour of companies in which our members’ savings are invested. For example:
- Assessment of ESG practices along with financial analysis. This makes it possible to choose the best securities in a sector or assess their performance. Some of the practices that are looked at: energy and emissions management, human rights respect, environmental impact or even community relations.
- Shareholder engagement. This gives us the opportunity to hold discussions and interact with companies so we can help them improve their ESG practices. We’re committed to the climate and strive to convince companies to make a similar commitment to increase their energy efficiency, migrate to renewable energy and even transform their business model.
What makes Bâtirente an RI leader? For over 15 years, Bâtirente has worked with intensity and conviction to promote responsible finance, establishing itself as a well-known and respected industry leader. We joined as signatories of the United Nations Principles for Responsible Investment (PRI) from their very creation in 2006! All our investment managers have done so, too. The integration of ESG factors is at the heart of our investment process; this allows us to provide long-term added value to our members, while generating a positive social impact and contributing to the well-being of our planet.