A Potential Tax-Effective Alternative to GICs
ETF Insights Don Hauka, Market One Media ETF Insights Don Hauka, Market One Media

A Potential Tax-Effective Alternative to GICs

On October 26, 2022, the Bank of Canada announced another 50 basis points increase to the overnight rate in an attempt to control inflation, increasing the target overnight rate to 3.75%. As a result of the sharp rate hikes this year, all major Canadian fixed income indices are down significantly, and fixed income investors may want to look for alternative investment opportunities for income and capital preservation.

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Dividend Growth – Resiliency in Volatile Markets
ETF Insights Don Hauka, Market One Media ETF Insights Don Hauka, Market One Media

Dividend Growth – Resiliency in Volatile Markets

The MSCI World Index and MSCI World Information Technology Index (a proxy for high growth stocks) have reached bear market territory, falling more than 25% year to date. Most of this year’s stock market decline has come from earnings multiple contraction driven by rising inflation and interest rates. However, dividend growth stocks (represented by the MSCI World Dividend Masters Index) have shown strong resilience and outperformed both indices during this year’s market downturn with less volatility as shown in the chart and table below.

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Inflation Is Here to Stay
ETF Insights Don Hauka, Market One Media ETF Insights Don Hauka, Market One Media

Inflation Is Here to Stay

To say inflation has been running hot might be an understatement without proper context. On August 10, 2022, the Bureau of Labor Statistics announced that the Consumer Price Index in the U.S. increased by 8.6% from the prior year through July. This was down only marginally from last month when the year-over-year inflation through June rate came in at 9.1%, which was a 40+ year high. The chart below shows that inflation began to take hold in early 2021 as vaccines were rolled out and the economy began to recover from the pandemic. While initially thought to be deflationary, the pandemic became a powerful inflationary force around the world as consumers, whose balance sheets were buoyed by government support, purchased goods at a record pace while supply, which was negatively impacted by pandemic shutdowns, could not keep up.

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INFLATION CONCERNS IN THE POST-COVID ECONOMY
ETF Insights ETF Insights

INFLATION CONCERNS IN THE POST-COVID ECONOMY

Given the historic levels of fiscal and monetary stimulus during the pandemic, inflation concerns are rising. Ahmed Farooq, SVP, Head of Retail ETF Distribution at Franklin Templeton looks at how expectations for rising prices is impacting fixed income markets.

Les craintes inflationnistes augmentent en raison de la mise en place de mesures de relance budgétaire et monétaire en réponse à la pandémie de la COVID-19. Ahmed Farooq, premier vice-président et chef de la distribution de FNB de détail à la firme Franklin Templeton, examine la façon dont les attentes de la hausse des cours influent sur les marchés de titres à revenu fixe.

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