Mike Philbrick’s Top Picks for Sept. 18, 2026

Mike Philbrick, CEO, ReSolve Asset Management

Focus: Exchange Traded-Funds

Top Picks: BMO Aggregate Bond Index ETF, Alpha Architect U.S. Quantitative Value ETF, iShares Global Infrastructure Index ETF

MARKET OUTLOOK:

We’ve spent a lot of time asking what artificial intelligence (AI) can do. I think the next phase is about who finances it, and at what price.

Every industrial revolution spends capital before it creates productivity. AI is no different. Data centres, power generation, transmission, semiconductors and physical infrastructure all have to be financed before the productivity gains arrive. At the same time, governments have enormous financing requirements of their own.

Capital may be abundant, but risk-bearing capacity is not infinite. And increasingly, capital has a meaningful price.

That changes the investment landscape.

For years, investors had very little competition for equities because bond yields were exceptionally low. Today, broad Canadian investment-grade bonds, using XBB as a proxy, offer a yield to maturity of roughly four per cent. In the U.S., AGG currently offers a yield to maturity of roughly 5.2 per cent, with a 30-day SEC yield of 4.84 per cent.

Those aren’t spectacular returns, but they represent a meaningful hurdle rate for every other asset in a portfolio.

Equities can still perform well. Economic growth remains solid and productivity has been strong. But higher valuations now have to compete with meaningful yields from fixed income. The Federal Reserve highlighted that tension this week, describing capital investment as robust and inflation as still elevated while raising rates another quarter point.

I think that puts a premium on three things: income, valuation discipline and scarce productive capacity.

Investors should ask not only which technologies will win, but who gets paid to finance the buildout, whether they are paying a sensible price for future growth, and who owns the infrastructure everyone else needs.

The question isn’t whether stocks or bonds win next. It’s whether your portfolio still reflects the price of capital today.

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TOP PICKS:

BMO Aggregate Bond Index ETF (ZAG TSX)

ZAG provides broad exposure to the Canadian investment-grade bond market, including federal, provincial and corporate bonds. It tracks the FTSE Canada Universe Bond Index and is designed to serve as a core fixed-income holding.

The important change is that bonds have an expected return again. ZAG currently offers a yield to maturity of roughly 3.8 per cent with about 6.9 years of duration. That may not sound exciting after several strong years for equities, but that is exactly the point. Investors no longer need to take equity risk simply because fixed income offers very little return.

I am not making a call that bonds will outperform stocks or that interest rates are about to collapse. I think the more important portfolio question is whether an allocation built when bonds yielded one or two per cent still makes sense when high-quality fixed income yields close to four per cent.

Inflation remains the key risk. If inflation proves persistent, yields could remain elevated or rise further, creating price volatility for intermediate-duration bonds.

But after a period when equities dramatically outperformed fixed income, investors should revisit their overall risk allocation.

Portfolio takeaway: Bonds have become genuine competition for capital again. ZAG offers Canadian investors a liquid, diversified way to rebuild that part of the portfolio.

Alpha Architect U.S. Quantitative Value ETF (QVAL NASD)

QVAL is a concentrated U.S. value strategy designed to identify some of the cheapest stocks in the market. Rather than simply buying companies with low price-to-book ratios, its quantitative process uses measures including EBIT relative to total enterprise value to search for potential mispricing. The fund currently has approximately US$622 million in assets.

For much of the low-rate era, investors were rewarded for paying increasingly high prices for distant growth. I think an environment where capital has a meaningful cost changes that calculation.

That does not mean growth companies cannot continue to perform. AI can be transformative, economic growth can remain healthy and corporate earnings can rise. But none of those things eliminate valuation.

In fact, one of the lessons from previous capital-investment booms is that the technology can ultimately succeed while investors who paid too much for the early winners still earn disappointing returns.

QVAL deliberately looks very different from a capitalization-weighted index, so investors should expect periods of meaningful tracking error. Value can remain out of favour for extended periods, and the portfolio can have significant cyclical and sector exposures.

Portfolio takeaway: When capital has a price, investment discipline matters. QVAL is an explicit bet that what you pay for future cash flows matters again.

iShares Global Infrastructure Index ETF (CIF TSX)

CIF provides global exposure to infrastructure businesses involved in areas such as electricity, transportation and water. The ETF currently holds about 60 companies, has approximately $1.5 billion in assets, and trades at roughly 14.7 times earnings.

We have spent enormous amounts of time trying to identify who will win the AI race. I am increasingly interested in a different question:

Who owns the things every winner has to use?

AI may ultimately be digital and enormously productivity-enhancing, but getting there requires a tremendous amount of physical investment. Power generation, electrical infrastructure, engineering, construction, transportation and other real-world capacity cannot be created as quickly as software.

That makes scarce productive capacity interesting.

CIF is not a pure AI fund, and I view that as an advantage. It provides broader exposure to infrastructure businesses whose assets may benefit not only from data-centre investment, but also from electrification, grid modernization, industrial reshoring and the need to expand physical capacity generally. BlackRock specifically describes the portfolio as global infrastructure exposure spanning electricity services, transportation and water utilities.

Infrastructure still carries risks, including interest-rate sensitivity, regulation and cyclical capital spending.

Portfolio takeaway: Instead of only owning the companies spending the capital, CIF provides exposure to some of the productive capacity they’re spending it on.

PAST PICKS: SEPT. 26, 2025

Global X Silver Miners ETF (SIL NYSE)

Then: US$70.00

Now: US$94.43

Return: 35%

Total Return: 36%

VanEck Uranium + Nuclear Energy ETF (NLR NYSE)

Then: US$136.23

Now: US$108.19

Return: -21%

Total Return: -18%

Vanguard FTSE Emerging Markets All Cap Index ETF (VEE TSX)

Then: $44.85

Now: $50.36

Return: 12%

Total Return: 14%

Total Return Average: 11%