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The case for dividend income has become even more compelling as record-low interest rates and macroeconomic
conditions have driven bond yields down. In uncertain and choppy markets, yield-starved investors are looking for
ways to satisfy their income needs.
The bull market in equities recently celebrated its seventh anniversary, and many investors question its
sustainability. The argument has been made that central banks have engineered the recovery by flooding global
capital markets with liquidity. In reality, they claim, the global economy is in poor shape and as a result,
the current bull market is unsustainable.
In recent weeks, market participants have once again begun handicapping the odds that the Federal Reserve
(Fed) will hike interest rates for a second time this summer. The debate and anxiety over whether the Fed will
move in June, July, or September misses a larger point: The Fed will likely move interest rates slowly and
deliberately higher and will have its eyes focused squarely on the global economy and financial market
conditions as it normalizes monetary policy. We don't think the Fed is any hurry to raise rates and should
continue to keep its options wide open.
It took 25 years, but by the end of 2015 exchange-traded funds had reached nearly $90 billion in assets
under management (AUM) in Canada, with a record $16.5 billion in net inflows last year alone.1
Based on recent growth trends, ETF assets could top $100 billion sometime during 2016.
There has been much talk in the financial press about exchange-traded funds (ETFs), which in their simplest
form simply mirror a particular index. That could be anything from the S&P/TSX 60, or a gold index made up of gold
mining companies that trade on a specific stock market.
It has been a long - and many would say - well-earned period of outperformance for U.S. assets.
Since the global financial crisis, U.S. equities have soared, propelled by rising corporate profits
and an easy Fed. But no upturn lasts forever. How to tell when it has ended?
Personal conversions often mark dramatic turning points in history. In the 4th century AD,
Roman Emperor "Constantine the Great" was convinced that divine intervention was needed before a critical
Well-known for his four investment newsletters, his TV and radio commentary, and as a best-selling author, Pat McKeough is also a portfolio manager. For two decades he has been providing advice and guidance to a group of Canadian investors through his Successful Investor Wealth Management service. Pat and his team of experts handle hundreds of millions of dollars for their clients. He also issues quarterly reports on the state of the markets and what his clients can expect in the months ahead.more...
For many emerging market debt (EMD) investors, an allocation to EMD is typically achieved through investing in emerging market sovereign bonds, which are denominated in a hard currency, most commonly U.S. dollars. This fixed-income category, which represents a country’s external borrowings, is most commonly referred to as external debt. U.S. dollar-denominated external debt is benchmarked off of U.S. Treasuries (trades at a spread over similar maturity U.S. Treasury bonds) but typically has higher yields to reflect factors such as inferior liquidity and lower credit quality.
Cash, fixed income, equity and where to put them – asset allocation, in other words – is what plays on the minds of portfolio managers these days, more than I can ever remember. With the seemingly herculean efforts of governments and central banks around the world to continue to prop up anemic and crumbling economies, transparency and clarity comes at a premium. And because fiscal policies are so important to a healthy growing economy, especially with the burden of debt that many industrialized nations carry, it seems too often these policies and outcomes are held hostage by ideology and political interest. As investors, we really are up against one of the most complicated, frustratingly opaque investment environments in recent memory. The big question is, How do we deal with it?
Socially responsible investing (SRI) couples an investor’s societal, environmental, and ethical values with their investment decisions. SRI is the process of making investment decisions in pursuit of social and environmental returns in addition to seeking financial returns producing a “triple bottom line.”
Including socially responsible products in their investment portfolio is of growing importance to Canadian investors. Between 2000 and 2010, Canadian assets in socially responsible investing (SRI) mandates grew by an average of 27% per year to an impressive $530 billion. Most of these assets are currently represented by institutional investors, including leading pension plans such as the Ontario Teachers Pension Plan and Canada Pension Plan. As is often the case, retail investors are likely to follow this institutional trend, and advisors with a good understanding of how SRI mandates operate will no doubt be ideally placed when it comes to gathering these assets. With that in mind, this article looks at the approach of RBC Global Asset Management (RBC GAM) to SRI by examining how we incorporate social responsibility into long-term investment goals, and by specifically examining several energy companies included in our SRI universe.
As we have been forecasting for some time, government bonds appear to have hit a wall in the first quarter. The DEX Government Bond Index returned -0.80%, while the broader DEX Universe Bond Index declined 0.21%. By contrast, the DEX Universe All Corporate Bond Index gained 1.42% in the first quarter as spread tightening compensated for higher government bond yields. With spreads narrowing to just over 600 basis points above Treasuries, high-yield bonds once again led the way in fixed income markets, with the Barclays US High Yield 2% Capped Index returning 5.35% over the first quarter.
By Martin Grosskopf | Wednesday, November 30, 2011
In an emissions-constrained economy, natural gas is often viewed as a more environmentally friendly alternative to coal. It produces half the carbon dioxide on an energy-equivalence basis and contains almost none of the heavy metals that are typically associated with coal. Accordingly, natural gas is a significant and growing source of electricity in North America. We expect this trend to continue as a result of plans to shut down coal facilities over the next decade and concerns over the safety of nuclear power, particularly after the Japanese nuclear crisis. Despite the perceived environmental benefits of natural gas, however, opposition to a relatively new process for extracting the resource – known as hydraulic fracturing, or “fracking” – is growing in North America and Europe.
CIBC Global Asset Management is proud that the Renaissance Canadian Small Cap Fund has been honoured with a FundGrade “A” rating by Fundata Canada. It is gratifying to be included in the elite group that represents the top 10% in the category, and to be recognized for the risk-return characteristics which are so important for investors and their advisors in their endeavors to build stable, growing portfolios.
Since 2008, investors have faced volatile financial markets, buffeted by fears of sovereign debt default, inflation expectations, currency debasement, and slow growth in developed economies. And yet, one bright spot has remained constant through these tumultuous times – resources. Skyrocketing demand from emerging market countries for key resources like oil, coal, and copper and depleting supplies bode well for commodity prices in the years to come.
Value managers are well known for seeking mispriced assets, but the importance of reinvested, compounding dividends is sometimes overlooked. For the CIBC Canadian Equity Value Fund and the Renaissance Canadian Core Value Fund, we seek out opportunities with the best total return potential. That total return includes both the capital appreciation in the stock price and the accumulated dividends from what has become the new way of clipping coupons.
Despite a debt crisis in Europe, government austerity measures, and currency wars, the performance of global stock markets turned in a respectable year. The MSCI World Index was up 5.3% in the fourth quarter and up 6.8% in 2010. The theme of small-cap outperformance continued. The Mawer Global Small Cap Fund returned 8.0% in the quarter and 16.3% in 2010.
By Jean Charbonneau | Wednesday, December 01, 2010
Many investors focus their fixed-income investments on domestic or developed market bonds, without considering emerging market (EM) bonds. Yet, EM bonds have produced consistently strong total returns over the last several years. Today the EM debt market is considerably larger and less risky than it was 10 years ago and is expected to continue to develop over time. The ability to provide significant diversification and deliver superior long-term total return potential has made this an increasingly important asset class for a wide range of investors.