David Cockfield, managing director of Northland Wealth Management
Focus: Canadian equities and ETFs

MARKET OUTLOOK

Canadian and U.S. equity markets have continued to rally into the second quarter of 2019. With interest rate increases on hold, fears of an impending recession have faded. Tariff negotiations between the U.S. and China seem to be proceeding well, which is reassuring for markets. Levels are approaching previous highs, which will likely provide some resistance to further gains. Higher market levels will likely depend on upcoming quarterly earnings reports. Any earnings upside surprises could well encourage equity markets to break out and move higher.

TOP PICKS

ISHARES CORE S&P TOTAL MARKET ETF (XUU.TO)

This ETF replicates the performance of the S&P Total Market Index net of expenses. It offers a very wide participation in U.S. equity markets with underlying holdings in the thousands. The management expense ratio (MER) is at a low 0.07 per cent. Last purchased in April at $29.65.

ISHARES NASDAQ BIOTECHNOLOGY ETF (IBB.O)

This U.S. ETF seeks to track the investment results of an index composed of biotechnology and pharmaceutical equities listed on the NASDAQ. The exposure is 82 per cent biotech, 10 per cent pharmaceuticals and 7 per cent life sciences.  With an aging population and economic growth, this sector will continue to grow at a good pace. Expense ratio is a low 0.47 per cent. Last purchased in April at $103.89.

ISHARES CORE MSCI EMERGING MKTS IMI INDEX ETF (XEC.TO)

This ETF replicates the performance of the MSCI Emerging Markets Investable Market Index. A low-cost way to own over 1,500 stocks from emerging markets worldwide. It's five largest concentrations are China at 30.6 per cent, Korea  at 14.4 per cent, Taiwan at 12.2 per cent, India at 9.9 per cent, and Brazil at 7.1 per cent. Management fee 0.25 per cent. Last purchased in March at $27. It has the highest volume growth projection in 2019.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
XUU N N Y
IBB N N Y
XEC N N Y

 

PAST PICKS: MAY 25, 2018

VANGUARD FTSE EMERGING MARKETS ALL-CAP INDEX ETF (VEE.TO)

  • Then: $35.26
  • Now: $35.42
  • Return: 1%
  • Total return: 3%

ISHARES CORE S&P/TSX CAPPED COMPOSITE INDEX ETF (XIC.TO)

  • Then: $25.63
  • Now: $26.42
  • Return: 3%
  • Total return: 6%

ISHARES CORE MSCI ALL-COUNTRY WORLD EX-CANADA INDEX ETF (XAW.TO)

  • Then: $25.92
  • Now: $26.80
  • Return: 3%
  • Total return: 6%

Total return average: 5%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
VEE N N Y
XIC N N Y
XAW N N Y

 

Twitter: @northlandwealth
Website: www.northlandwealth.com