Over the past 2 weeks I have had the opportunity to meet with several of our ‘institutional’ investment managers so I wanted to send you out an outline of what they are thinking and how they are positioning our/your CORE portfolios.
2013-2015 they were concerned because CREDIT was going bad and financial systems were contracting
Government bonds ‘ruled’
Summer of 2016 saw a change in their outlook
Started to engage in risk assets (equities and corporate credit)
Government bonds sold
NO RISK EQUALS ZERO REAL RATE OF RETURN (after inflation)
Now (2017) they see an extension of equity cycle
Extended period of growth
POLITICAL risks are more of concern once we enter next recession…not right now
Corporate bonds though not cheap are supported by the economy
See some CDN$ weakness ahead
Not concerned about horrible investment grade bond market…bond yields have already moved higher
CORE inflation is only 1.7% so long bonds will not move much higher
Emerging markets have LESS GOVERNMENT DEBT than developed markets
More growth in emerging markets
China is growing
Research and development spending is high
E-commerce system is being developed and is a growth factor
Clean energy being developed
China has 30% of the worlds renewable energy
Electric cars have double the sale of U.S.
Resource sectors are stabilizing
$45-55 range for oil makes sense
low cost firms make money in this price range (think Suncor)
International markets have higher growth than the U.S.
Inflation is back but only in the 1% range
If you have any questions regarding this e-mail, financial plan or portfolio please contact the office (Gayle) or myself.
I have also attached a chart showing the tactical changes made in the CI Signature Global Income and Growth Portfolio over the last 3 years.
I CONTINUE TO VIEW THIS FUND AS THE KEY CORE HOLDING FOR MOST CLIENT PORTFOLIOS. AS THE CHART BELOW SHOWS THIS FUND HAS OUTPERFORMED ITS PEER GROUP OVER 1,2,3,4,5 AND 10 YEAR TIME FRAMES
https://www.theglobeandmail.com//globe-investor/funds-and-etfs/funds/summary/?id=65104&companyName=CI Signature Global Income & Growth
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