Navigating the Canadian Equity Landscape: Dispersion, Energy Transition, and Opportunities | EP163

Art of Boring

In this episode of the podcast, Mark Rutherford, Co-Manager of the Canadian large-cap equity strategy, discusses the current investment landscape in Canada, highlighting the wide dispersion in sector performance and the impact of central bank policies. He delves into the long-term theme of the global energy transition and its far-reaching effects on various market sectors in Canada. Insights into insurance and banking sector performance are provided, as well as examples of specific portfolio holdings within the Canadian equity strategy. Key points from this episode:

• On the surface, healthy and attractive returns can be found across equity markets in Canada. However, there is quite a bit of dispersion under the surface.
• Year to date, top-performing sectors include energy and materials – which have been the top performers for a few years now – while telecoms, real estate, and some utility stocks are lagging the market.
• One longer-term theme that is top of mind, both for Canada and numerous countries around the world, is the ongoing energy transition.
• Long-term opportunities that Canada is well positioned for include energy production, natural resources and renewables, critical minerals, and utilities.
• AI has been a big driver of incremental change within the utilities sector. Companies like Fortis, Hydro One, and AltaGas are investing more every year and building up the rate base, which ultimately will grow their earnings over time.
• One simple heuristic Mark’s team uses when evaluating portfolio construction and portfolio holdings is to ask where they see headwinds and where they see tailwinds.
• Life insurance companies have benefited from higher interest rates and improved earnings mix, while banks are facing challenges due to slowing loan demand and higher provisions for loan losses.

Host: Andrew Johnson, CFA, Institutional Portfolio Manager Guest: Mark Rutherford, CFA, Portfolio Manager For more details and full transcript visit: https://www.mawer.com/the-art-of-boring/podcast/navigating-the-canadian-equity-landscape-dispersion-energy-transition-and-opportunities-ep163 This episode is available for download anywhere you get your podcasts. -- Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at www.mawer.com.

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