Mike Philbrick’s Top Picks for Dec. 30 2025

Mike Philbrick, CEO, ReSolve Asset Management

Focus: Exchange-Traded Funds

Top picks: Vanguard Canadian Government Bond Index ETF, iShares S&P/TSX Capped Energy Index ETF, Invesco Solar ETF

MARKET OUTLOOK:

2026: Rebalance the winners — Add ballast with bonds and trend

A useful year-end discipline is remembering that what gave you an edge in 2025 can imprison you in 2026. This bull run has made it easy to drift into “house money” behaviour: too much tech/AI because it worked, too much risk because dips kept getting bought.

So step one into 2026 is simple: rebalance back to target risk. Index exposure isn’t as diversified as it looks when a handful of mega-caps dominate returns. If you’ve had big gains in tech, trim to plan. Same with scarce assets: if you’ve followed my gold and silver views and they’ve run, review sizing and harvest some gains.

For investors not yet in scarce assets, the approach is walk–crawl–run. They deserve a place in portfolios, but don’t chase—start small, build over time, and size it so you can live with the volatility.

The bigger change for 2026 is macro: we’re entering a year where policy, inflation expectations, and growth may not move in the clean way investors got used to. If disinflation outpaces rate cuts, real rates can rise even as the Fed eases—an environment where “Fed cuts = stocks up” may not always hold.

That’s also why bonds can play a bigger role again as ballast, and why trend-following managed futures may be especially useful. Trend strategies tend to do their best work when markets stop being smooth and start producing persistent moves across stocks, bonds, currencies, and commodities—exactly the kind of multi-regime, higher-volatility setup 2026 could deliver.

Bottom line: rebalance winners, broaden beyond crowded trades, and consider adding diversifiers—bonds and trend—that can help when the market’s leadership, rates, and volatility shift.

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TOP PICKS:

Vanguard Canadian Government Bond Index ETF (VGV TSX)

Theme: Rebuilding ballast + rebalancing optionality

After a strong equity run and historically high index concentration, government bonds are back to doing the job investors actually want them to do: stabilize portfolios and create dry powder for rebalancing when volatility spikes.

Vanguard is a low-cost way to own a broad basket of investment-grade Canadian government bonds (federal + provincial) in Canadian dollars. It seeks to track the Bloomberg Global Aggregate Canadian Government Float Adjusted Bond Index, giving diversified exposure across maturities and issuers.

Why it matters for 2026: if growth disappoints, policy expectations shift, or risk assets experience a valuation “air pocket,” high-quality government bonds tend to be one of the few assets that can hold value and offset equity drawdowns and provide rebalancing opportunities—and Vanguard’s low-fee structure is excellent (management fee reduced to 0.10 per cent; management expense ratio (MER) shown at 0.17 per cent).

iShares S&P/TSX Capped Energy Index ETF (XEG TSX)

Theme: Inflation shock hedge + Canada’s energy torque

If 2026 brings any combination of geopolitical risk, supply disruptions, or reflation pulses, energy can act as a portfolio hedge—because oil and gas spikes often hit portfolios through inflation first, and then through a growth shock.

iShares gives concentrated exposure to Canadian energy producers via the S&P/TSX Capped Energy Index, with a cap on individual names (no single stock above ~25 per cent at rebalance).

For Canadian investors, it’s also a practical way to express “real-asset beta” without reaching for single names. The fund’s fee profile is straightforward (MER shown at 0.61 per cent).

Invesco Solar ETF (TAN NYSE)

Theme: AI power demand → electrification → solar supply chain leverage

The AI buildout is ultimately a power story. Data centres, grid upgrades, storage, and electrification create a multi-year capex cycle—and solar sits in the “incremental electrons” conversation.

Invesco tracks the MAC Global Solar Energy Index and invests at least 90 per cent in index constituents across the solar ecosystem. This is not a low-volatility holding—solar is cyclical, policy-sensitive, and rate-sensitive—so it fits best as a satellite position for investors who want targeted exposure to the electrification theme (total expense ratio shown at 0.71 per cent).

PAST PICKS: APRIL 11, 2025

iShares MSCI Min Vol USA Index ETF (XMU TSX)

Then: $83.92

Now: $87.38

Return: 4%

Total Return: 5%

BMO Long-Term US Treasury Bond Index ETF (ZTL COBE)

Then: $36.77

Now: $36.94

Return: 0.46%

Total Return: 3%

Vanguard FTSE Developed All Cap ex North America Index ETF (VIU TSX)

Then: $34.52

Now: $43.09

Return: 25%

Total Return: 28%

Total Return Average: 12%