2022 Investment Report
For the year ended March 31, 2022 the Jewish Community Foundation of Montreal’s pooled fund had a net return of 3.4%. The annualized net return for the last five years has been 6.4%.
For the fiscal year, the FTSE Canada Universe returned
-4.5% (CAD), the S&P/TSX composite 20.2% (CAD), the
MSCI World Net 9.4% (CAD), and the MSCI Emerging
Markets Net -11.9% (CAD).
The Canadian fixed income market had a positive
performance in the early part of the fiscal year, however,
yields started rising towards the end of 2021 due to
concerns about inflation and expectations that central
banks would be raising interest rates in 2022. Bond yields
continued rising across the curve in Q1 2022 as fears
over high inflation and tighter monetary policy mostly
outweighed geopolitical concerns. This led to negative
performance in the first quarter of 2022.
The onset of fiscal year was positive for most equity
markets, buoyed by vaccination campaigns and the
hope that things would soon return to business-as-usual.
Concerns about supply chain issues and the onset of the
war in Ukraine started having an effect on the outlook
for global growth in Q1 2022.
The positive performance of Canadian equities over the
beginning of the fiscal year was led by Shopify as well as
the energy and financial sectors. In Q1 2022, the energy
and materials sectors led the way due to the strength of
The global equity market produced positive returns
at the beginning of the fiscal year with the energy,
information technology, real estate and financial sectors
leading the way. However, performance was down in the
first quarter of 2022. Soaring inflation across developed countries increased both the pace and magnitude of expected monetary tightening.
The emerging equity markets had negative performance in
the second half of 2021, mainly due to the Chinese market.
The sell-off of 2022 was global in nature and affected
emerging markets as well. Increase in US bond yields also
put pressure on emerging equities.
The private market portfolio helped sustain absolute returnsover the fiscal year. The JCF private equity portfolio returned 36.8% (USD), global real estate 15.7% (USD), private debt 10.4% (USD), timber, agriculture, and infrastructure 24.0%(USD), and Hedge Funds 2.5% (CAD).
In private equity, multiples and valuations were supported
by increased competition for deals and record amounts
of commitments for most of the year. However, 2022
saw a cool down in investments and valuations in certain
regions and sectors.
Recovery of the real estate market gained momentum
across the US, Canada, the UK, and Europe, however,
the recovery has been mixed, depending on the sector.
The recovery in the Asia Pacific region varied by
In private debt, the multiple paid by private equity firms
for LBO financings continued its upward trajectory. LBO
related loan issuance hit the highest rate since 2007
while pricing dynamic tilted in favour of borrowers.
Due to ongoing geopolitical risk, the volatility was felt
in the leveraged loan segment, with the secondary
market experiencing an acute sell-off in early March
before retracing some of that move, with new issuance
essentially halting amid the tumult.
Natural resources deal activity grew throughout 2021 and
2022 as the sector gained favor in the rising inflationary
environment. Private energy managers reported
continuation of the valuation increases. Agriculture, timber,
metal, and minerals did well overall. JCF’s infrastructure
portfolio has a natural resources tilt and benefited from
Hedge Funds finished 2021 with modest gains though all
major categories and managed to finish 2021 in positive
territory. Long/short equity strategies and event-driven
strategies declined in Q1 2022. Macro and relative value
strategies posted strong positive results. Overall, while
Hedge Funds did decline in Q1 2022, they provided some
Currency and Currency Hedging
The JCF uses a dynamic currency hedging policy approved by the Investment Committee with the aim of mainly reducing negative effects of currency fluctuations while attempting to benefit from positive fluctuations. The hedging of USD exposure is adjusted quarterly in light of the perceived value of the USD/CAD exchange rates vs the purchasing power parity published by the OECD. Over the fiscal year, the Canadian dollar appreciated by less than 1% against the US dollar. Over that period, the currency hedging strategy mandated no hedging.
The JCF has a long-term outlook and its investment policy seeks to generate average returns that will support the programs funded by our donors. The investment policy and philosophy are set by the Investment Committee – primarily to invest for the long-term, to use a multi-manager approach, to diversify the portfolio by investing in an array of asset classes, and to have an allocation to hedged investment strategies with the goal of smoothing the Fund’s return volatility over time. The policy targets and actual exposures as of March 31, 2022 were: