TSX ETF Investor Centre
Safety in Tech?
The tech sector (S&P 500 Info Tech Index) has outperformed the broader market and all other sectors year-to-date, with a 21.5% total return vs 7.0% for the S&P 500 Index, despite macro headwinds and volatility in the bond market due to recent bank failures. Many investors are wondering whether the tech sector, particularly mega cap tech, is the new safety trade.
Canadian Banks – Stability in Good Times, Bad Times
The global banking industry has once again been thrown into turmoil with the recent regional bank failures of Silicon Valley Bank, Silvergate Capital, and Signature Bank in the U.S., as well as the takeover of Credit Suisse by UBS Group at the behest of regulators in Switzerland. While there were specific issues impacting each of these entities, these recent failures have highlighted the risks associated with the rapid increase in overnight interest rates over the past year as central banks around the world have moved swiftly to tighten policy in response to high inflation. These risks include declining asset values (i.e. bond investments) as a result of higher rates across the yield curve, particularly for banks that run a duration mismatch on their balance sheets, as well as the potential for banks to quickly lose deposits as depositors search for higher yields in investment products and/or flee in the face of a real or perceived banking crisis.
Investment Solutions for Market Uncertainty
In this article, we discuss several strategies that may help investors navigate today’s market uncertainties
Europe - The Worst May Be Behind Us
European equity markets have strongly outperformed the U.S. over the past three months in both U.S. dollar and local currency terms. The magnitude of the recent outperformance is unprecedented in the last 15 years, with the Euro STOXX 50 versus S&P 500 materially breaking above its 100-week moving average for the first time since the Great Financial Crisis, except for a brief period in first half of 2015 when the European Central Bank (ECB) launched Quantitative Easing in January. The 100-week moving average is a trend indicator, and the break above this trendline could be an indication that Europe’s structural underperformance has come to an end. We believe several factors have led to Europe’s recent outperformance and should continue to drive this trend.
2023 Outlook: Pause or Pivot and the Recession Obsession
We expect 2023 will be another challenging year, especially in the first half as the market continues to price in recession scenarios. While inflation has begun to decelerate, it remains elevated and there is still some uncertainty in the deceleration path. The rapid pace of monetary policy tightening has been a headwind for risk assets but the expected moderation in rate hikes should become less of an overhang as the effects of recent policy decisions begin to reflect in the economic data. As the year unfolds, the market’s ability to price in a mix of growth, inflation, and recession risk should become more clear and provide support for risk assets. As a result, we believe investors should remain defensive in this volatile inflationary market regime.
U.S. Preferred Shares – An Attractive Income Opportunity in Volatile Markets
Rapid rate increases in 2022 led to substantial price declines broadly across fixed-income asset classes including U.S. preferred shares. The Manager believes the current yield and price level of U.S. preferred shares offer an opportunity for investors to lock-in an attractive level of income with long term capital appreciation potential.
A Unique Multi-Asset Approach to Income & Growth
The U.S. Consumer Price Index increased 7.7% year-over-year in October, which was the smallest increase since the beginning of 2022. The equity market responded with a greater than 800 point surge in the Dow Jones Index on October 12, 2022. However, one month of lower-than-expected inflation data doesn’t signal an equity market reversal and the near-term interest rate decisions from the U.S. Fed still remain unclear. Given the current backdrop, prudent investors should consider a diversified investment portfolio that will thrive in both volatile market conditions and through periods of recovery.
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.
Fall Into ETF Investing: Your Guide to ESG ETF Investing
ESG (Environmental, Social, Governance) Investing is on the rise as investors become more interested in the idea of aligning their investments with their values and see that in order to do so, they don’t necessarily need to give up performance.
Jessica Moorhouse, host of the More Money Podcast and millennial money expert joins Paul Riccardella, Executive Director at MSCI, leader in ESG Indexes, and Rosa Van Den Beemt our very own Engagement and Active Ownership expert at BMO Global Asset Management.
Fall Into ETF Investing: Building a Strong Foundation - Broad Market ETFs
A portfolio is only as strong as it’s core. In this session we go back to where it all started when it comes to ETFs, broad market ETFs. These simple to use, low cost index trackers remain a powerhouse when it comes to building a core portfolio.
Host of the Build Wealth Canada Podcast, and founder of the Canadian Summit, Kornel Szrejber will unpack this topic with experts Alfred Lee, Portfolio Manager and Investment Strategist at BMO ETFs, and Graham Mackenzie, Head of ETFs with the TMX, Canada’s largest stock exchange.