David Cockfield, managing director and portfolio manager at Northland Wealth Management
Focus: Canadian stocks and ETFs

MARKET OUTLOOK

After a brief sell-off in October, North American equity markets again began to register new highs in November. On the positive side, employment, wages and consumer demand remain on the upside. Some progress on ending the China-U.S. tariff war has also encouraged investors. Corporate earnings for the third quarter while not exciting were positive. Overall, while the prospects for a recession in 2020 seem reduced, the tariff war continues, negative interest rates in Europe and Japan are still in place and Brexit looms in January. Equity markets have enough to worry about to argue for more sideways movement until some of these significant unknowns are resolved.

UPDATE: The Shares Nasdaq Biotech ETF (IBB) was sold at $106.30 after being purchased in April at $103.89. We were looking to reduce our equity exposure.

TOP PICKS

ISHARES CORE MSCI EMERGING MARKETS IMI INDEX ETF (XEC:CT)
Last purchased in October at $26.11.

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. Five largest concentrations are China at 29.7 per cent, Korea at 12.6 per cent, Taiwan at 12.9 per cent, India at 9.7 per cent and Brazil at 7.4 per cent. Management fee is 0.25 per cent.

BMO LOW VOLATILITY CANADIAN EQUITIES ETF (ZLB:CT)
Last purchased in November at $34.30.

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 2.4 per cent, with a management expense of 0.39 per cent.

ISHARES CORE CANADIAN SHORT TERM CORPORATE & MAPLE BOND ETF (XSH:CT)
Last purchased in November at $19.24.

This ETF gives investors a means to invest in a diversified portfolio of short-term fixed income securities. Largely focused on notes issued by Canadian chartered banks, the ETF offers an alternative to leaving funds in cash, but provides full market liquidity. With a low management expense ratio of 0.10 per cent and a yield of 2.7 per cent, the ETF offers a safe place in difficult markets.

PAST PICKS: NOV. 30, 2018

SCOTIABANK (BNS:CT)

• Then: $72.30
• Now: $76.01
• Return: 5%
• Total return: 10%

BMO COVERED CALL UTILITIES ETF (ZWU:CT)

• Then: $12.78
• Now: $13.97
• Return: 9%
• Total return: 16%

APPLE (AAPL:CT)

• Then: $178.58
• Now: $265.76
• Return: 49%
• Total return: 51%

Total return average: 26%

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