Full episode: Market Call Tonight for Friday, July 12, 2019
David Cockfield, managing director and portfolio manager at Northland Wealth Management
Focus: Canadian equities and ETFs
U.S. and Canadian equity markets continue to face resistance at their record highs. While U.S. and Canadian financial data continue to show reasonable GDP growth, good consumer confidence and employment numbers, investors are still concerned. There’s evidence that world economic growth is slowing and would be further reduced by continuing and impending tariff wars. The fact that the Federal Reserve is moving to reduce rates shows that there are economic risks of a significant nature. Until the prospect of a tariff war is reduced, equity markets will remain nervous and subject to potential decline.
BMO LOW VOLATILITY CANADIAN EQUITY ETF (ZLB.TO)
Last purchased in July 2019 at $33.92.
This Canadian equity ETF is designed to provide investor exposure to a low beta portfolio of large-cap Canadian stocks. The beta of a security measures its sensitivity to market movements. If the market is down, a low beta security will decline less. This underlying portfolio is rebalanced in June and reconstructed to reflect changes in beta ratings in December. Yield is 2.48 per cent, with a management expense of 0.39 per cent.
BMO LOW VOLATILITY U.S. EQUITY ETF (ZLU.TO)
Last purchased in July at $37.20.
This ETF provides exposure to a portfolio of large-cap U.S. stocks with low sensitivity to market fluctuations. Utilities, consumer staples, healthcare and consumer discretionary stocks make up 68 per cent of portfolio. The portfolio is rebalanced yearly and reconstructed at year-end. The expense ratio is a low 0.33 per cent and the yield is 1.62 per cent.
ISHARES CORE MSCI EMERGING MARKETS IMI INDEX ETF (XEC.TO)
Last purchased in June at $26.09.
This ETF replicates the performance of the MSCI Emerging Markets Investable Market Index. It’s a low-cost way to own over 1,500 stocks from emerging markets worldwide. Its five largest concentrations are China at 29 per cent, Korea at 12.1 per cent, Taiwan at 11.7 per cent, India at 9.5 per cent, and Brazil at 8 per cent. The mmanagement fee is 0.25 per cent.
PAST PICKS: JULY 6, 2018
ISHARES S&P/TSX CAPPED ENERGY INDEX ETF (XEG.TO)
- Then: $13.18
- Now: $9.12
- Return: -31%
- Total return: -29%
BANK OF NOVA SCOTIA (BNS .TO)
- Then: $75.10
- Now: $69.83
- Return: -7%
- Total return: -2%
- Then: $54.57
- Now: $60.33
- Return: 11%
- Total return: 17%
Total return average: -5%