David Cockfield, managing director and portfolio manager at Northland Wealth Management 
FOCUS: Canadian equities and ETFs
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MARKET OUTLOOK

The TSX has had a good run in October, almost reaching its previous February 2017 high of 15,943.29. Strong economic growth in the U.S. and Canada, plus good corporate earnings reports, should encourage equity markets to the upside. Unfortunately Canadian investors are facing the uncertainty of failing NAFTA negotiations. There are also concerns around tightening mortgage requirements hitting real estate, plus increased taxes on small corporations by Ottawa. With these uncertainties still in place, Canadian equity markets will continue to lag the record-breaking performance of U.S. equity markets.

TOP PICKS

BMO LOW VOLATILITY CANADIAN EQUITY ETF (ZLB.TO)
This Canadian equity ETF is designed to provide investors 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. The underlying portfolio is rebalanced in June and reconstructed to reflect changes in Beta ratings in December. Yield is 2.63 per cent with a management expense of 0.39 per cent. Last purchased in October at $30.32.

iSHARES CORE S&P/TSX CAPPED COMPOSITE INDEX (XIC.TO)
This Canadian equity ETF seeks to replicate the performance of the S&P/TSX Capped Composite Index. Investors can achieve a quick participation in Canadian equity markets through this ETF. Management fee is a low 0.05 per cent. The 12 month trailing yield is 2.76 per cent. Last purchased in October at $25.03.

BMO MSCI EUROPE HIGH QUALITY EQUITIES HEDGED TO CAD INDEX ETF (ZEQ.TO)
This ETF has been designed to replicate the performance of the MSCI Europe High Quality Growth Stock Index Hedged to the Canadian dollar. Inclusion of individual stocks is capped at five per cent. 72 per cent of the portfolio is in the U.K., Germany and Switzerland. Management expense is 0.45 per cent and the yield is 1.97 per cent. Last purchased in October at $20.43.

PAST PICKS: DECEMBER 2, 2016

BCE (BCE.TO)

• Then: $57.39
• Now: $59.55
• Return: 3.79%
• Total return: 8.94%

TD BANK (TD.TO)

• Then: $63.32
• Now: $72.75
• Return: 14.89%
• Total return: 18.95%

VERMILION ENERGY (VET.TO)

• Then: $55.88
• Now: $43.52
• Return: -22.11%
• Total return: -18.47%

TOTAL RETURN AVERAGE: 3.14%
 

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