Each quarter, Bâtirente’s Investment Strategy Manager, Jean-François Dumais*, shares our funds’ performance results with you and offers his comments regarding financial markets. This issue is a recap of 2021.
How would you characterize 2021 in terms of the stock markets?
Despite it being Year 2 of the pandemic, 2021 could be considered an extraordinary year! The Canadian market achieved a performance of over 25%. Global markets had yields of 17%, while global small-cap markets earned nearly 15%. This situation can be explained by the fact that various governments around the world put in place specific tax measures aimed at supporting businesses during these trying circumstances. Some of them even saw record profits. Central banks kept their key interest rates low.
What about the bond market situation?
In contrast with stock markets, 2021 was a difficult year for bond markets. In fact, the sharp rise in interest rates led to a major decline for the Canadian bond index (-2.5%). We also started witnessing the return of higher inflation, the likes of which we hadn’t seen since the 1990s.
In that context, how did Bâtirente’s Diversified Funds behave?
The performance of Bâtirente’s Diversified Funds was exceptional in 2021! They posted returns of between 6.4% and 15.8%, depending on their risk profile. Each of these funds yielded a return that was well beyond its comparison index (or benchmark). Active management—which is at the heart of our investment decisions—allows us to adapt to different market environments so we can preserve and grow our members’ savings. The positive performance of Bâtirente’s Diversified Funds in 2021 can be mostly attributed to that of our various share portfolios and our portfolio of real listed ESG assets (i.e., related to Environmental, Social and Governance issues). This portfolio includes securities associated with the real estate and infrastructure sectors. Over the past five years, Diversified Funds have generated annualized yields varying between 4.2% and 10%—significantly greater than the inflation rate recorded for that same period.
Did other Bâtirente Funds also perform well?
Definitely! It’s been noted that the Bâtirente Canadian Equity Multi Fund posted an absolute performance of 31.9%. It added 6.8% compared to the market index. Bâtirente’s Global Equity Multi Fund achieved a total return of 17.3%. Fund performance for Bâtirente’s Global Small Cap Equity Multi was 14.7%. The performance of these two funds was similar to that of their comparison indexes.
And what about fixed income securities?
Fixed Income Funds saw a negative or zero return. The dramatic increase in interest rates contributed to the 0.0% performance of the Bâtirente Treasury Multi Fund and to the -0.9% return for the Bâtirente Bond Multi Fund. However, bear in mind that the relative performance of these funds was still excellent mainly because of the shorter term (or maturity) involved. A shorter term is beneficial when interest rates go up. One of our goals is to maintain and protect our members’ assets during downturns.
To learn more about Bâtirente Funds and get updated performance information, see the Bâtirente Funds section 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.