Back Quarterly update 1Q 2018

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


A transcript of this episode is available below, modified for a more enjoyable reading experience. For more posts exploring the ideas we talk about in the episode, check out our Related Reads links.

Guest Speakers

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

Related Reads

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This blog and its contents are for informational purposes only. Information relating to investment approaches or individual investments should not be construed as advice or endorsement. Any views expressed in this blog were prepared based upon the information available at the time and are subject to change. All information is subject to possible correction. In no event shall Mawer Investment Management Ltd. be liable for any damages arising out of, or in any way connected with, the use or inability to use this blog appropriately.