Some income-focused investors may be wondering whether dividend aristocrats ETFs are suitable in portfolios amid high inflation and interest rates.BRENDAN MCDERMID/Reuters
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Advisors’ role has expanded greatly in the past couple of decades to focus more on financial planning and holistic wealth management services. Nevertheless, investing is still a critical component of the overall service offering.
After all, clients go to their advisors, first and foremost, to get help on managing their finances and investment portfolios. So, if advisors lack even the most basic insights into the themes and trends shaping the investment landscape, clients are sure to lack faith in their abilities on a variety of other tasks.
Here are 10 articles on investing themes and strategies published in the past year that are worth a second read:
Which of the Big Three telecoms are a good bet as a ‘recession-resistant’ defensive investment?
Canada’s Big Three telecommunications companies have plenty of appeal as investors look for safety in a challenging environment. Rogers Communication Inc. RCI-B-T, BCE Inc. BCE-T and Telus Corp. T-regularlyT are all recession-resistant with high demand for their utility-like services. Customers need cellphone plans, internet connections and access to streaming services in all seasons. BCE and Telus pay high dividends, which are rising regularly. And while all three compete with one other, high barriers to entry mean it’s tough for new players to get a foothold.
Money managers divided on energy’s prospects as demand for oil hits ‘highest point in history’
As market participants look for other places to invest besides technology stocks, energy is one of the sectors getting some attention. The price of oil has been climbing, which should help boost producers’ profitability. Furthermore, the dividends most of the companies in the sector pay are attractive to many investors. “Despite more than a year of recessionary fears, the demand for oil today is at its highest point in history,” says Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners LP in Toronto.
How to play a looming copper bull market with demand set to rise
Copper is taking on a new shine as a critical metal in the clean energy transition. Although resource experts are upbeat on the price of the coveted commodity over the medium-to-longer term, some miners are now takeover targets as merger and acquisition activity heats up. “The environment is ripe for higher copper prices given demand shocks from the energy transition,” says Jon Case, portfolio manager and research lead for metals and materials at CI Global Asset Management.
Six stocks to benefit from the aging baby boomer trend
Baby boomers represent about 25 per cent of Canada’s population, and baby boomer households hold an average of $1.2-million in net worth, accounting for about 50 per cent of the country’s wealth, according to Statistics Canada. So, while millennial spending habits often make headlines, investors might be better off paying attention to the needs and wants of the aging boomer population.
What to watch out for when companies offer dividend reinvestment plans
Dividend reinvestment plans (DRIPs) make a lot of sense for investors if they don’t need cash dividends to live on. The purchases are free of fees and the compounding effect adds up. Coreen Sol, senior portfolio manager at CIBC Wood Gundy in Vancouver, says the purchases have more of an impact in a weak market. The shares are acquired at a depressed price, so the long-term benefit is magnified as conditions improve. “I would recommend a DRIP if it’s an investment that you’re holding for a long period of time,” she says.
Private mortgages set for growth as traditional lenders tighten criteria in risk-off environment
Private mortgage investments are high-yield assets likely to attract more attention from those seeking to diversify portfolio holdings, even as real estate faces an uncertain future in the near term. “Mortgage investments have historically provided a stable income stream to investors with low volatility and can offer enhanced returns compared with other fixed-income options,” says Simon Carlsen, senior director and head of mortgage investments at Nicola Wealth Management Ltd. in Vancouver.
Are dividend aristocrats ETFs a good bet for cash flow with high inflation?
Some income-focused investors may be wondering whether dividend aristocrats exchange-traded funds (ETFs) are suitable in portfolios amid high inflation and interest rates. In Canada, dividend aristocrats ETFs hold qualified companies that are listed on the Toronto Stock Exchange, have increased their annual dividend for the past five years, and have a market capitalization of a minimum of $300-million.
Direct indexing could bring enhanced tax opportunities to Canadian investors
Direct indexing may not be accessible in Canada but its tax benefits have some industry watchers examining the possibilities. On a direct indexing platform, if a client wants to own a particular benchmark, the client would hold individual securities instead of purchasing units of an ETF or mutual fund, says Manmeet Bhatia, president and chief executive officer of Fiduciary Trust Canada, part of Franklin Templeton, in Vancouver. “The systematic tax management opportunities available through direct indexing versus pooled investments represent a key advantage for private wealth portfolios.”
What Ontario’s self-certified investor pilot program means for advisors and investors
A pilot underway in Ontario to broaden the criteria of who qualifies as an accredited investor is being welcomed by advisors as the next step in the “modernization” of the private investment space – and an opportunity to broaden their client base. Still, some industry experts caution advisors to tread carefully with the interim investment rules and ensure clients aren’t risking too much of their capital.
Can the magnificent seven tech stocks continue winning in 2024?
It has been a stunning year for the so-called “magnificent seven” stocks that have powered the U.S. stock market. Specifically, they have gained 101 per cent so far this year, according to the Bloomberg Magnificent 7 Total Return Index. In contrast, the S&P 500 Total Return Index is up 21 per cent. “I think you will see some moderation [in gains] next year,” says Peter Hofstra, senior vice president and co-head of equities at Toronto-based CI Global Asset Management. “We hold six of the seven names and believe they will be a source of positive returns next year.”
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