Following the difficult semester that just ended last may 31, the solidarity Fund of the FTQ and Fondaction, the CSN should review downwards the prices of their respective shares.
How much ? The decline should not be dramatic, far from it. If I look at the “performance” of various financial indices in the course of this six-month period ranging from December 2019 to may of last year, the decrease is expected to play in the range of 4 % to 9 %. If this is the case, there really isn’t anything to worry about.
Here are the benchmarks on which I rely to carry out the forecast performance during the last six months :
- Fund canadian balanced : -4,5 %
- S&P/TSX venture composite index Toronto : down 9.3 %
- Small-cap stocks canadian : +4,1 %
- BMO small-companies in quebec : 2.8% in
- Index Quebec 30 : -17,4 %
- Quebec Index 120 : -15,9 %
- Canadian bonds Universe : +4.5% a
- Long-term Obligations : +4,8 %
- Treasury bills (91 days): +0,9 %
As another reference that might give us an interesting overview of the mid year performance of the portfolios, I like the firm Aubin Actuaries, which bears on the returns of pension funds in different asset allocations, that is, the three following indexes : canadian bonds (FTSE Canada universe) canadian equities (S&P/TSX composite index), global equities (MSCI World).
Thus, a portfolio consisting of 50% canadian bonds and 50% equities (25 % Canadian, 25 % World) would have ended the half-year (1 December to 31 may) with a performance of 0 %.
35 % bonds and 65 % equities (32.5 per cent Canada/32.5% For the World), the portfolio would have ended the half with only -2 %.
We agree that such a mid year performance ranging from -2 % to 0 % is in itself a darn good performance for a semester marked by a large collapse in stock market (-35 % from mid-February to 23 march) and an economic paralysis that is unprecedented because of the COVID-19.
WHAT TO DO ?
If you have the intention to make a contribution to an RRSP in the Fund of the FTQ or Fondaction CSN, you should wait until after the official revision of the share price to make your contribution. The odds of a downgrade are very high. And in the “worst” case, if there was a miraculous increase, it will be minimal !
On the other hand, if you are part of the shareholders (retirement or 65 years of age and older) who have the right to exit their investment funds FTQ and CSN, and that you don’t want to take the slightest risk, you must make your withdrawal request prior to the announcement of the new price of the action. So you will receive the lower of two prices, either the current price or the price revised.
The revision of the share price of the Fund QFL will be announced at the end of the month of June and Fondaction CSN, on Thursday, July 9.