Monthly Market Commentary

The Hunt for Income & Inflated Asset Prices

September 2016

In a bid to stimulate economic growth and inflation, many of the world’s central banks have implemented monetary policy that has never been tried before. The two headline-grabbing policies have been near-zero interest rates and quantitative easing (purchases of longer-duration bonds by the...

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Why We Shun Gold Stocks

August 2016

The S&P/TSX Composite Index has been one of the world’s best-performing indices so far in 2016. On a price basis, the TSX Composite is up 11% year-to-date; this compares to the FTSE 100 up 6%, the S&P 500 up 5%, and the Nikkei 225 down 14%1. Strong performance from commodities has...

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Sovereign Bond Yields: How Low Can They Go?

July 2016

When we look at sovereign bond yields, we can’t help but get Chubby Checker’s 1962 hit single ‘Limbo Rock’ stuck in our heads. For those of you who don’t remember that little ditty, an excerpt follows: Jack be limbo, Jack be quick Jack go unda limbo stick All around...

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Canadian Manufacturing Stuck in Neutral

June 2016

Manufacturing is vital to Canada. In 2015 it accounted for 11% of the country’s $1.99 trillion economy and provided Canadians with 1.7 million jobs. In the years leading up to the financial crisis, loonie weakness versus the U.S. dollar provided a big boost to the Canadian manufacturing...

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Canadian Bank Analysis

May 2016

Canadian bank stocks, after years of strong performance following the financial crisis, stumbled in 2015. Figure 1 shows that each of the Big Six banks finished the calendar year at a lower level than where they started it. Exposure to the distressed oil industry was the driving force behind this...

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Preferred Shares: Part 1 – A Primer

April 2016

Preferred shares are hybrid securities, a cross between stocks and bonds. They are complicated investments that tend to be misunderstood by the average investor. We are well versed in the preferred share market because these shares are an important asset class for one of the institutional portfolios...

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Oil’s Impact on Government Finances

March 2016

Sitting in Canada, it’s easy to get wrapped-up in the impact that falling oil prices have had on the country’s economic picture. Certainly, with two rate cuts by the Bank of Canada and a deteriorating federal budget, Canadians from coast-to-coast are feeling the effects of low commodity...

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Opportunities in Unconventional Places: Real Return Bonds

February 2016

We are always on the hunt for investment opportunities. This often requires questioning the consensus view by forming contrarian opinions. With the recent launch of the Cowan Income Opportunities Fund, we think it’s fitting to discuss on opportunity we recently discovered on the fixed-income...

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Rising Interest Rates and Equity Valuations

January 2016

As the Federal Reserve finally increased rates in December, we believe it’s a good time to discuss what effect continued hikes could have on our holdings (even though the Canadian overnight rate is unlikely to increase anytime soon). Rising interest rates are an obvious risk for the pricing of...

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