Canadian Corporate Bond Market Outlook (Marc-André Gaudreau)

Sunday, December 11th, 2011

Natcan’s Marc-André Gaudreau, PM for Horizons Alphapro Corporate Bond ETF (HAB:TSX), discusses his outlook for Canadian corporate bonds in the following Q&A:

1. Will Interest rates rise despite government action to keep them low? Is the bond market activity suggesting a move in rates over the next 12 months?

2. Will the European crisis have any further impact on North American credit markets?

3. What’s your outlook for Canadian Corporate Bonds vs. Government issued bonds over the next 6 months?

4. What’s your target duration for Canadian Corporate Bonds held in HAB?

5. Are there any big differences in the bonds you hold in HAB vs. Index tracking corporate bond ETFs?

Source: Horizons ETFs

Tags: Alphapro, Bond Market, Bond Rates, Canadian Bonds, Canadian Government, Cdn, Corp Bonds, Corporate Bond, Corporate Bond Market, Corporate Bonds, Credit Markets, Duration, Euro, Flv Player, Gaudreau, Government Action, Horizons, interest rates, Market Outlook, Natcan, Outlook, Target, True Source, Tsx
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NEI’s Richard Fogler: “Why TD and Scotia Will Lead Canadian Banks”

Thursday, October 13th, 2011

TD and Scotia will lead Canadian banks, says Richard Fogler of Kingwest and Company, fund manager of NEI Investments’ Northwest Canadian Equity Fund.

This manager has 40% of his fund committed to the Canadian financial sector.

He highlights why he likes TD and Scotia as well as Rogers, Telus, Bombardier and Onex.

Source: ClientInsights.ca

Tags: Autoload, Bombardier, Canadian, Canadian Banks, Canadian Equity Fund, Financial Sector, Flv Player, Fogler, Hana, Investments, Lead, Northwest, Onex, Rogers, Td, Telus, True Loop, True Source
Posted in Canadian Market, Markets | Comments Off

Jim Rogers – Why The Commodity Bull Still Has Room To Run

Monday, May 30th, 2011

(May 23, 2011-Edinburgh, Scotland) Jim Rogers, Co-Founder of Quantum Group of Funds, talks to Dan Richards about why the commodity bull still has room to run.

Source: ClientInsights.ca

Tags: Autoload, Bull Run, Co Founder, Commodity, Edinburgh Scotland, Flv Player, Jim Rogers, Quantum Group, Rogers Co, True Loop, True Source
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Why Jim Rogers is Bullish Gold

Monday, May 30th, 2011

(May 23, 2011-Edinburgh, Scotland) Jim Rogers, Co-Founder of Quantum Group of Funds, talks to Dan Richards about why he is bullish on gold.

Source: ClientInsights.ca

Tags: Autoload, Co Founder, Edinburgh Scotland, Flv Player, Gold, Hana, Jim Rogers, Quantum Group, Rogers Co, True Loop, True Source
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Sell in May and Go Away? Seasonal Rotation as an Investment Theme (4 Videos)

Monday, May 16th, 2011

Don Vialoux, portfolio manager, JovInvestment Management, and sub-advisor to the Horizons Seasonal Rotation ETF visited BNN on May 13, 2011 to discuss his thoughts on the market, as well as share his thoughts on what to do now that its May.

Since May has now solidly arrived (and with a thud!), many investors are revisiting the classic adage, or rather question, “Sell in May, and Go Away?” Don Vialoux, and his co-sub advisors, Brooke Thackray, and Jon Vialoux, on the Seasonal Rotation ETF (HAC-TMX) believe, the answer to that question is “Yes!” But, the old adage has some interesting exceptions, and is not the only seasonal investing idea …

We start off with a special 4-part video series featuring Brooke Thackray and Jon Vialoux, who provide insight into their ‘Seasonal Investing’ model, and cap it off with Don Vialoux’s thoughts, buy recommendations, as well as do-not-buy recommendations.

First, the 4 part series on Seasonal Investing:

1. What other opportunities are there over the next 6 months? (Brooke Thackray)

3. Are there any sectors of the market that tend to do better over the next 6 months? (Brooke Thackray)

4. Discuss three investment selections? (Jon Vialoux)

Here are Don Vialoux‘s thoughts, followed by his buy, “DON’T BUY“, and “WAIT for the right time” recommendations:

First of all, during his appearance, last week, on May 13, 2011, one of the seasonal ideas Vialoux touched on was the Agriculture sector. Seasonality is right from the middle of July until the end of the year. The position he owned (MOO-N) went up 50% last year. This is the season when farmers are growing their crops and selling them before the end of the year for taxes. To reduce taxes, they buy fertilizers, tractors, etc. This year is even better because grain prices can go significantly higher.

He also shared his comments on the CAD$ vs. US$? The CAD$ historically bottoms around the middle of February and then goes strongly on the upside until the end of May. Looks like seasonality is peaking out a little early this year.

Vialoux also noted in one of his comments that May 2nd, 2011 was a crucial date in the US market when all the economically sensitive sectors all of a sudden turned out the lights. Then the market started rolling over and continued moving lower, most noticeably in the materials sector, and in silver and gold. The Canadian markets peaked on March 7th and so they’ve been in a corrective phase for 10 weeks. Be cautious.

Here are Don Vialoux’s TOP PICKs as mentioned during his May 13, 2011, visit to BNN.

TOP PICK – HAP Floating Rate Bond ETF (HFR-T) 10.130
He likes the Floating Rate Bond ETF. It’s a money market instrument but is very high yielding at 2.5%. A way of hiding in the market for a period of time until you need cash.

TOP PICK – Claymore Premium Money Market ETF – (CMR-T) 50.010
(This has been a TOP PICK April 30/10. No change.) This a Money Market fund. Great liquid security where you can go in and out very quickly. He is looking for some seasonal trades coming up this summer.

TOP PICK (A TOP PICK April 30/10. No change.) 5-month Treasury Bills. Looking for markets to go into a corrective phase until probably the fall, so a good place to park your money.

DON’T BUY – Husky Energy (HSE-T) 27.780 This one has been having a difficult time technically along with most Canadian energy stocks. Sector peaked out a lot earlier than normal. Developing a downward trend.

DON’T BUY – Kinross Gold (K-T) 13.810 This is not only in a downward trend but it also just broke a key support level. Relative to the other gold stocks, this is not a good performer.

DON’T BUY – Hudbay Minerals Inc. (HBM-T) 13.980 Technically Hudbay is currently in a downward trend. Has not been following the seasonal patterns that other base metal stocks have been following. There is support around $11. Copper and zinc prices have been trending down. WAIT for support.

DON’T BUY – CitiGroup (C-N) 41.530 They are doing a reverse stock split, 1 for 10. Problem with this type of split is that a lot of people who previously owned 100 shares now only own 10, which is an odd lot. A lot of people do not like odd lots so end up selling them. It puts a cap on for a long period of time. Trending down with no indication of a bottom.

DON’T BUY – Teck Resources Ltd.(B) (TCK.B-T) 44.850 Teckh historically does very well around November to January each year. It’s currently in a downward trend. There is minor support at the current level. It is currently outside of the period for season strength.

DON’T BUY – PetroBakken Energy (PBN-T) 16.260 This stock just had a breakdown a few days ago. Its in a distinct downward trend so stay away for now. Seasonally you want to buy oil stocks around the beginning of November. The real sweet spot is beginning of January until the end of April.

DON’T BUY – Paladin Resources (PDN-T) 3.290 Vialoux has some concerns on uranium stocks right now. This one is currently in a downward trend. The low in 2010 seems to be a logical level for support but he is concerned that both Cameco (CCO-T) and Denison (DML-T) just broke through key support levels. Downward trend is not over yet. (not to mention the Japan Nuclear Fiasco)

WAIT – Agnico-Eagle Mines (AEM-T) 59.440 Like other gold stocks this one shows a distinct downward trend. Gold stocks tend to do well from July to December and this one’s had a pretty good run last year. WAIT until about the middle of July when you see support.

WAIT – Potash Corp of Saskatchewan (POT-T) 49.920 This is one that you going to want to buy some time in June. POT Recently broke down through a key support level.

WAIT – Barrick Gold ABX-T 43.630 Now in a downward channel but downside risk is probably not too much from current levels. Historically it bottoms right around July and then moves higher until the end of the year.

Don Vialoux, Brooke Thackray, and Jon Vialoux, of JovInvestment Management are sub-advisors and portfolio manager for (HAC-T) – Horizons AlphaPro Seasonal Rotation ETF, listed on the TSX.

Source: Commentary – BNN, Stockchase.com
Source (Video): Horizons ETFs

Tags: Canadian, Don Vialoux, ETF, ETFs, Exceptions, Flv Player, Good Time, Hana, Horizons, Insight, Investing, Investment Portfolio, Investors, Old Adage, Perspective, Portfolio Manager, Sectors, Thackray, Thud, Tmx, Video Series, Videos
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Cundill’s David Slater – The Case for US Banks

Wednesday, April 6th, 2011

David Slater, portfolio manager for Mackenzie Cundill American Class, explains why the fund owns positions in the four top US retail banks and this is one of the rare occasions in its history that Cundill has seen value in US banks.

Manager Profile-David Slater

Tags: Autoload, David Slater, Flv Player, mackenzie cundill, Manager Profile, Portfolio Manager, Rare Occasions, Retail Banks, S David, True Loop
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Bonds, High Yield Oil Equities Would Benefit from Long Term Middle East Unrest, says Jeff Young

Friday, March 4th, 2011

[videoplayer file="http://www.nexgenfinancial.ca/video/Jeff-Young-02-22-2011.swf" /]

Jeff Young, fund manager NexGen Canadian Large Cap, NexGen North American Large Cap, NexGen Global Dividend, and the NexGen Canadian Diversified Income Fund.

Since my last commentary in January, the largest external driver of equity markets has really been the civil unrest that we’re seeing in North Africa, and the Middle East. Now the initial problems in places like Tunisia and Egypt was largely ignored by commodity and equity markets as their impact on the global economy is relatively small.

Now the problems in Libya have been taken much more seriously, given Libya’s role as an oil producer, an exporter of a million barrels a day. We’ve also seen some unrest in Bahrain, home of the US Navy’s 5th fleet, and that’s being watched quite closely. Bahrain’s only a small oil producer, but its very close politically and geographically to Saudi Arabia, the world’s largest oil power.

Now leaders in Saudi Arabia are offering to improve benefits for their population in order to head off mass unrest in that country, however, it remains to be seen whether those measures will be enough.

In Saudi Arabia, 60 percent of the population is under 18 years of age, and almost half live in poverty, so increased unrest is certainly possible.

Dissidents are using social media to organize a nationwide protest in Saudi Arabia on March 11, so it remains to be seen how big that will be. and well be watching that closely.

While all these events are very interesting and important from a humanitarian and a geo-political perspective, they’re also very important from an investment perspective.

Despite years of talk and some progress towards a green economy, global economic activity still runs on oil and any threat to the consistent supply of oil raises the prices and acts a tax on both [general] production and consumption and threatens economic growth.

Now, elevated oil prices combined with the current and planned reductions in monetary and fiscal stimulus would create powerful headwinds for economic growth and consequently for equity prices.

The economies of large oil importers like the US, Japan, Germany and even China, would be especially affected.

Canada on the other hand has the advantage of being an oil producer and an exporting country which may help mitigate the impact of rising oil prices. That said, not all sectors of the economy will escape unscathed.

If higher oil prices were to meaningfully slowdown the economic growth, we’d expect to see weakness in the consumer sector, particularly in consumer discretionaries, or high priced items. Slowing economic activity, a less confident consumer, combined with increasing input costs are not an attractive combination and profit margins would undoubtedly suffer.

On the other hand, bonds and high yielding equities could be beneficiaries in this scenario as geo-political uncertainty, risk aversions grow, and economic activity slows, you would see bond yields go lower. High Yielding oil related equities with the ability to grow their production would certainly be very attractive in that sort of environment.

Now the final impact of the popular movements in the Middle East remain to be seen. Its possible that a relative quiet will once again return to the region without any long term impact on oil prices, but its far from certain and the situation bares close watching.

Now while stock returns are based on the fundamental attributes of each company, these fundamentals are heavily influenced by the economic environment. Input costs, customer demand and financing rates all impact individual companies and all are based on the broader economy.

Now if we want to understand how a company is going to perform in the future we need to try to understand the external forces that it faces. For now, we believe the global economy will continue to grow and the environment remains positive for equities. That said, many potential headwinds exist, making prudent portfolio management critical.

Copyright (c) NexGen Financial

Tags: 5th Fleet, Canadian Market, China, Civil Unrest, Commodity, Consistent Supply, Dissidents, Diversified Income, Dividend, Flv Player, Global Economic Activity, Global Economy, Hana, Initial Problems, Investment Perspective, March 11, Middle East Unrest, North Africa, oil, Oil Power, Oil Producer, Political Perspective, Problems In Libya, Saudi Arabia, True Loop, Us Navy
Posted in Canadian Market, Energy & Natural Resources, Markets, Oil and Gas | Comments Off

The Outlook for Canadian Financials (Bob Decker)

Tuesday, February 22nd, 2011

Dynamic/Aurion’s Bob Decker discusses which sectors of Canadian financials have the best prospects.

Dierdre McMurty interviews Bob Decker, of Dynamic Funds, who in 1996 founded Aurion Capital, which today manages pension assets of $5-billion.

DM: Bob, we’re going to talk today about your outlook, and your views on the Canadian Financial sector, but, can you begin by giving us an overview of the environment that the sector operates in?

Bob Decker: Well, currently we’re in a recovery in the financial sector that is fairly well extended. The recovery in the consumer has occurred, we’ve written off a lot of the bad loans in the past cycle, but, the mortgage
market has expanded dramatically in Canada, and that I expect to actually plateau this year. And banks are now
looking to make commercial loans their focus in the upcoming year.

DM: Where do you see the incremental earnings growth coming from then for the banks?

Bob Decker: As I said in the commercial area, the broadening, the expansion of the economy, banks are now going to focus on that as their driver, and it looks to me that that’s both in the U.S. and Canada; there’s many
opportunities to take advantage of the expansion.

DM, Now, within the fund, one of your top holdings the end of December 2010, was TD [Financial Group]. What is about TD that particularly attracts you? What do you like about it?

Bob Decker: Well, TD has executed an expansion to the U.S. and with almost I think a flawless execution. They’ve created a footprint in the Northeast U.S. that’s now ready to benefit from the recovery in the U.S. consumer, and commercial markets. In addition, they have just made a recent acquisition in the Auto Finance area, that I think will provide them a platform of growth in the next few years.

DM: Alright Bob, so now we know how you feel about TD Bank, what about some of the other Canadian Banks?

Bob Decker: Well, we are very encouraged by the acquisition of Marshall and Isley, by Bank of Montreal. They had a small footprint in the Chicago area, but they needed to scale that business. We’re looking at that very carefully right now as a potential driver, because as I said before, the U.S. market is where we think the growth will be superior, and I think, if they execute well this is a great acquisition opportunity for them.

DM: Any others?

Bob Decker: We’re downweighting our interest in the CIBC lately because they’ve benefited from the recovery of the consumer, and that’s now reflected in their share price.

DM: Another area where you’re active in the financial sector is the asset managers. How are you investing in asset managers? What’s the rationale?

Bob Decker: There are a number of unique opportunities in asset management in Canada. Both in financial assets and private equity assets such as the likes of Onex and Brookfield. There are also opportunities in the non-bank financials in the brokerage area that we’re quite interested in. These are low risk financials because they have large free cash flow and they don’t have financial leverage like the banks do.

DM: The large insurance companies have certainly made headlines the last couple of years. What’s your perspective?

Bob Decker: Life companies generated a lot of negative press the last couple of years because of their sensitivity to a decline in the stock market. Now, if it has recovered, they will have recovered as well. But theres a lot of sensitivity to the earnings growth that they use to have because they’ve had to deploy a lot of capital against some of those positions. We don’t think their growth rate is going to be what you can experience from asset managers or banks.

DM: And on the competitive front, how do the insurance companies look, the life companies.

Bob Decker: Well I think what people don’t really appreciate is how strong of a competitor the banking system is in the insurance area. They’ve all had an increase in the amount of focus on that area, and they’re formidable competitors with the strength of their balance sheets. And the competitive landscape has never been more
challenging for the incumbent players such as Manulife and Sun Life. We think that will be another stress for them in the year ahead.

DM: But what about Property and Casualty Companies in the insurance side?

Bob Decker: That’s an area that we have focused on in insurance, and we believe for example, that our holding in Intact Financial, one of Canada’s leading providers of auto insurance; you may know them as Grey Power, its a very well managed company, and they’re benefiting from the recovery from earnings coming from the restoration
of pricing power, and as a consolidator, we like that stock’s future, it looks very good.

DM: Thanks very much.

Source: ClientInsights.ca / Dynamic Funds

Tags: Aurion, Autoload, Bad Loans, Banks, Bob Decker, Canadian Market, CIBC, Commercial Loans, Dynamic Funds, Earnings Growth, Financial Group, Financial Sector, Flawless Execution, Flv Player, Footprint, Hana, Lot Loans, Mortgage Market, Outlook, Pension Assets, Plateau, Prospects, Sectors, Td, True Loop
Posted in Canadian Market, Markets, Outlook | Comments Off

Dynamic’s Domenic Bellissimo on Corporate Bonds

Tuesday, February 15th, 2011

Domenic Bellissimo discusses his views on corporate bonds in 2011.

Dierdre McMurty interviews Domenic Bellissimo, of Dynamic Funds on the subject of investing in corporate bonds. Bellissimo shares his view on current areas of opportunity, as well as areas that they are avoiding, and provides insight dispelling the BBB Public Private bond issuances.

Domenic Bellissimo was previously worked at a big bank on the Risk Management side, and he also worked at a big government pension fund on the credit analysis side.

DM: What did you learn in those previous positions that you can apply now?

Domenic Bellissimo: I spent a lot of time analyzing companies in the credit market learning how to structure transactions. What works, and what doesn’t. Basically, best practices. So a lot of that has been formulated and made its way into our current credit investment process.

DM: What’s your process? How do you go about setting up to invest in a corporate bond?

Domenic Bellissimo: We focus on three main things:

First we’ll screen the environment:
1) where do you want to be?;
2) where’s the best place to be investing?
3) where do you not want to be investing?

Then we’ll analyze each company, management teams, we’ll analyze the securities;

Lastly, we’ll monitor each investment on an ongoing basis to make sure its still a safe and sound investment.

DM: in a webcast back in December, you expressed some concerns about the current environment for corporate bonds; can you build out on that a little bit?

Domenic Bellissimo: Yes, actually, what we’re seeing over the past year is an increase in what we consider to be red flags. So one thing is risk premiums, which are compressing especially for the weaker issues (securities). Companies that historically were not able to issue in the public markets are now doing so, and these deals are oversubscribed. Covenants are starting to weaken, and lastly there is an increase in shareholder friendly activity, such as share buybacks.

DM: Just to follow up on your last point. You referred to “shareholder-friendly” activities, as something negative though … Why is that?

Domenic Bellissimo: Shareholder-friendly activities have the potential to undermine the value of credit-worthiness of any bond, so you have to be able to assess every management action in order to determine whether or not it has a negative impact on your investment.

DM: And Which industry sectors do you currently find the most attractive?

Domenic Bellissimo: We’re currently focusing on those sectors which have good cash flow generating abilities, so TELCOs and Cable for example. Sectors like the energy sector, which have a strong long term view on the underlying commodity, that being oil. And, also, best in class real estate companies.

DM: And what about the sectors where you’re really uncomfortable and you’re staying away?

Domenic Bellissimo: Well, first of all we’re underweight in financials across all of our mandates, and that’s predicated on the European situation and the concerns there, and [as well] a significant underweight in long dated financials [issues].

DM: And looking at the North American market, where are you finding the best valuations right now, in the corporate field?

Domenic Bellissimo: It ebbs and flows between Canada and the U.S., but right now I’d say that the U.S. is showing very good valuations especially on the recent back up in yields.

DM: What are the other areas, Domenic, you identified in that December webcast as a point of concern, were the bonds that were issued around public/private sector partnerships. Can you tell us a little bit more about your anxiety there?

Domenic Bellissimo: The public/private sector issuances, or triple B (BBB), as they’re commonly referred to, is something that historically has been the domain of insurance companies and pension funds. They’re issued in order to help finance infrastructure projects, such as hospitals. We look at them and we are concerned, and we’ve stayed away from them for three main reasons: 1) there’s a significant amount of construction risk, that frankly is hard to quantify, 2) many people look at these and view them as quasi-government issuances and frankly they’re not, and 3) they’re very illiquid securities.

DM: Thank you for that.

Tags: Areas Of Opportunity, Autoload, Bbb, Best Practices, Canadian Market, Company Management, Corporate Bond, Corporate Bonds, Dierdre, Domenic, Dynamic Funds, energy, Flv Player, Government Pension, Infrastructure, Insight, Little Bit, Lt, Management Side, Management Teams, oil, Opportunity, Pension Fund, Red Flags, Risk Management, Risk Premiums, Securities Companies, Sound Investment, True Loop, Webcast
Posted in Canadian Market, Credit Markets, Energy & Natural Resources, Infrastructure, Markets, Oil and Gas | Comments Off

Chris Arbuthnot: Putting the “B” in BRIC

Thursday, January 20th, 2011

Source: Clientinsights.ca

Manulife’s Chris Arbuthnot discusses Manulife Investments’ investing strategy in BRIC countries and specifically their Brazil strategy.

Tags: Arbuthnot, Autoload, Brazil, BRIC, Bric Countries, BRICs, Canadian Equity Fund, Canadian Investment Awards, Canadian Market, David Taylor, Div, Dynamic Value, Equity Investment, Flv Player, Hana, Investing Strategy, Investments, Lt, Manulife, True Loop, True Source
Posted in Brazil, Canadian Market, Emerging Markets, Markets | Comments Off