Infrastructure stocks are garnering attention as U.S. politicians work on passing a US$1-trillion bipartisan bill to build and upgrade everything from roads and bridges to waterworks, broadband, and the electrical grid.BRENDAN MCDERMID/Reuters
Equities continued to surge in 2021, a trend that has persisted since stock markets tumbled dramatically in the early days of the COVID-19 pandemic. Naturally, they continued to be a big topic of conversation between advisors and their clients this year.
Particular themes such as meme stocks, cryptocurrencies, technology, energy, supply chain issues, inflation, environmental, social, and governance (ESG), and several others received plenty of attention as North American stock markets rose by about 20 per cent this year.
For advisors, investment funds remained the strong foundation upon which to build client portfolios, but many looked to specific themes or sectors to gain an edge or protect assets from downside risk.
Here are 10 equities-related articles published on Globe Advisor that received much attention in 2021:
Six Canadian microcap stocks with growth potential
Microcap stocks offer potential for multibaggers, but keep in mind that they come with higher risk. Steven Palmer, president and chief investment officer, AlphaNorth Asset Management Inc., Bruce Campbell, president and portfolio manager, StoneCastle Investment Management Inc., and Robert McWhirter, president and portfolio manager, Selective Asset Management Inc., provided their top picks among microcaps with growth potential.
Why REITs will continue to deliver higher-than-average yields
In an age of rock-bottom interest rates, real estate investment trusts (REITs) are one of the few securities that provide older investors with decent, reliable cash payouts in retirement. Those payouts have come into question as the work force has abandoned urban offices for suburban homes and consumers avoid bricks-and-mortar retail for e-commerce. Nevertheless, Jenny Ma, director of equity research at BMO Capital Markets, says that “REITs will still be a place to get higher-than-average yields, especially versus other fixed-income vehicles like bonds.”
‘Perfect storm’ in semiconductor industry opens door to investors
A global shortage of all types of microchips has caused extended shutdowns at automobile plants and is delaying the launch of some consumer products in a squeeze that will likely continue for the rest of the year. For investors, it means opportunities in the companies that design and make semiconductors. They’re having a banner year and expect demand to stay strong in the foreseeable future.
How to play the new energy bull market
Oil and gas stocks, which had been left for dead in recent years, are enjoying a new lease on life amid surging commodities prices. Despite the strong rally in oil and gas stocks, many energy experts are still bullish on the sector as these commodities struggle to keep up with demand in a global, post-pandemic economic recovery. “We are in a multi-year bull market that will see oil trade at all-time highs,” says Eric Nuttall, partner and senior portfolio manager with Toronto-based NinePoint Partners LP. “Energy stocks can double or do more from here.”
What’s driving the surge in rate-reset preferred shares?
Prices of rate-reset preferred shares, which pay dividends at a fixed rate until they’re reset every five years, have been soaring. And as interest rates rise, these shares’ payouts will increase as their rates reset – regardless of what their issuers’ common stocks do on the basis of sales or profits. What’s driving the performance of these stocks is their architecture. Every five years, they adjust their payouts to the five-year Government of Canada bond rate plus a hefty bonus of several percentage points. That varies with each issue.
Compelling environmentally focused stock picks for an ESG world
Using ESG criteria to evaluate companies’ worthiness as investments is resonating with investors who seek to do good and make money too. But the “E” in ESG is grabbing more attention amid concerns about climate change, pollution, and waste. Environmentally focused companies have a more quantifiable impact and offer greater investment opportunities as well. Martin Grosskopf, vice-president and portfolio manager, AGF Investments Inc., Jeremy Lin, associate portfolio manager, Purpose Investments Inc., and Mike Dragosits, portfolio manager, Harvest Portfolios Group Inc., discuss the environmental investments in their funds.
Why battery technology is a key driver of electric vehicle success
A spate of announcements earlier this year from some of the largest automakers suggests that electric vehicles (EVs) may soon become more commonplace on our roads. For investors, batteries and related charging technology represent an interesting opportunity. Batteries are the single most expensive component of EVs – about 25 per cent of the total. Rene Reyna, head of thematic and specialty product strategy at Atlanta-based asset manager Invesco Ltd., quips that “EVs are sometimes referred to as a battery with four wheels.”
Six stocks that stand to gain from U.S. infrastructure spending
Infrastructure stocks are garnering attention as U.S. politicians work on passing a US$1-trillion bipartisan bill to build and upgrade everything from roads and bridges to waterworks, broadband, and the electrical grid. Jeffrey Sayer, vice-president and portfolio manager, Ninepoint Partners LP, Robert Lauzon, managing director and deputy chief investment officer, Middlefield Capital Corp., and Varun Anand, vice-president and senior portfolio manager, Starlight Capital, shared their top picks to play the U.S.’s building spend.
Stack Capital aims to give average investors access to private equity
There are few ways to invest in private venture capital companies for investors who are not high-net-worth or accredited. Stack Capital Group Inc. STCK-T is aiming to change that. The company, which launched and went public on the Toronto Stock Exchange in June, raised $107-million and will invest that in rising venture capital companies. Globe Advisor spoke with Jeff Parks, Stack Capital’s chief executive officer, and Brian Viveiros, vice-president of corporate development and investor relations, to find out more about the company and its intentions.
Six REITs that can deliver when interest rates begin to rise
REITs typically outperform when central banks hike interest rates. The strong economic growth associated with these time periods usually results in rising rents, lower vacancy, and improved profitability. On the other hand, REITs have historically underperformed when long bond yields rise as the increase in growth expectations can entice investors to take on more risk in their portfolios. Lee Goldman, senior portfolio manager, Signature Global Asset Management, a unit of CI Investments Inc., Dean Orrico, president and chief investment officer (CIO), Middlefield Capital Corp., and Dennis Mitchell, chief executive officer and CIO, Starlight Capital, shared REIT picks that they think can still do well when interest rates begin to rise gradually in a growing economy.
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