Savings Fund

December 31, 2018

Market Context

  • The Bank of Canada (BoC) raised its key lending rate three times in 2018 (in January, July and October), by 0.25% each time. The rate now stands at 1.75%.
  • Global economic growth moderated in the latter half of the year, as the impact of U.S.-led trade conflicts weighed on global demand. The American economy remains strong, nonetheless. The Canadian economy stalled in the third and fourth quarters as rising interest rates curbed spending by households and businesses.
  • Overall, the BoC feels that higher interest rates are still warranted to keep inflation near its target. The pace of increases, however, will depend on a number of factors.


  • The manager’s (Connor, Clark & Lunn) preference for corporate paper added value for the portfolio in 2018. Bank paper, floating rate notes and short-dated bonds comprise 68% of the fund.
  • Investments in T-Bills remain focused on provincial securities (32% of the fund).
  • The pre-fee yield of the fund at the end of December was 2.0%.