Quarterly update | 1Q 2018 | EP04

April 12, 2018 Print

This episode features insights on the past quarter (1Q18) by Greg Peterson, Portfolio Manager of Mawer’s balanced and global Balanced strategies. 

Highlights include:

  • The currency translation effect on Canadian equities
  • The biggest factors for finding a margin of safety for investors
  • Mawer’s asset mix changes – back to a neutral 60/40
  • How the credit market is functioning
  • Influencers that may cause market volatility going forward

 



Your host

cam porthole3 Cameron Webster, CFA, MBA
Institutional Portfolio Manager

Cam likes to think and act long-term. He has broad experience in the capital markets over his 20+ years as an analyst, portfolio manager, and client service professional. When not thinking about markets and investing, Cam trains and participates in other “boring” and disciplined activities such as ultra-endurance races—marathon, triathlon, one-day 300+km bike rides.

Shownotes

1:02 – All about currency:

  • The translation effect for Canadian invested in foreign equities
  • NAFTA, monetary policy expectations, energy prices (WTI)are all working against the Canadian dollar
  • International investors’ effect on Canadian equities

4:21 – What bank valuations say about how people are feeling about Canadian banks

“The interesting thing is that valuations or returns may reflect more expectations or concerns than the real numbers.”

5:24 – The biggest factors right now for finding a margin of safety for investors: diversify portfolios

6:42 – Mawer asset mix changes over the quarter: moving to a more neutral stance

  • Reducing equities (60% equity and 40% fixed income)
  • Reducing U.S. equity weight
  • “Volatility is not the reason in and of itself to reduce equities.”

8:06 – Discussion on the difference between volatility and risk and Mawer’s approach to both

10:25 – Looking forward: the influencers that may cause market volatility to continue

  • Full valuations
  • Reactions to negative noise/news (NAFTA, U.S./China tariffs)

12:30 – Signs on where we are heading can be seen early on in the credit markets. How the credit markets were functioning over the quarter.

13:53 – Turning to the positives. What could keep the cycle going longer.

15:35 – The tipping point: when bonds look more attractive than equities

17:07 – A 60/40 asset mix and why investors should hold bonds


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