Riel Roussopoulos
Three post-pandemic recovery picks, stocks still showing upside and bond ETFs on a tear: What you need to know in investing this week
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Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
Three stock picks for the post-pandemic recovery from $220-million fund manager Jennifer Radman
Portfolio manager Jennifer Radman, who oversees about $220-million across three funds for Caldwell Investment Management, felt the market start to shift at the end of the second quarter, when many technology stocks stalled, Brenda Bouw writes. At the same time, she says investors saw the “worst case” for cyclical stocks. It was also around that time that her team started to pick up a few beaten-down cyclical names in sectors such as steel, auto production, forestry and agriculture. Here she discusses three picks from her U.S. and Canadian funds: L3Harris Technologies, Interfor and Visa.
Have markets priced in all the good vaccine news? Not when it comes to these stocks
Bold investors may want to go bargain hunting in areas left behind in this vaccine-driven market rally, Ian McGugan writes. While several broad benchmarks of stock prices have jumped in recent weeks because following good news from medical trials, many individual sectors and companies are still trading well below their prepandemic levels. Consider airline stocks, which languish well below their January highs. Or look at real estate investment trusts (REITs), especially those that specialize in office and retail properties.
The U.S. Global Jets ETF, which tracks a basket of major U.S. airlines, has been surging on the vaccine news but is still more than 25 per cent below its prepandemic levels. In Canada, the Vanguard FTSE Canadian Capped REIT Index ETF, which holds a diversified basket of REITs, is trading 10 per cent below its level in January. The caveat: Anyone tempted to go this route should come equipped with patience and a tolerance for volatility. Read more here.
More trom Ian McGugan: Tesla zooms past Warren Buffett’s vast empire in market value, putting investors in a precarious position
Money is pouring into bond ETFs despite painfully low interest rates – here’s why
It’s a testament to the usefulness of bond ETFs that they’re selling briskly in a year when the outlook for fixed income has rarely looked less appealing, Rob Carrick writes. Introduced to the world 20 years ago right here in Canada, bond ETFs simplified life for investors who want to build their own diversified portfolios. They provide cheap, transparent, liquid and infinitely adaptable access to bonds, which otherwise must be purchased through investment dealers who have an excessive amount of power to dictate prices to clients. If your portfolio needs bonds, then you have to at least consider bond ETFs. Even in a low-rate world, these funds can be shaped to suit almost any investor’s needs. Read more here.
| Fund | Ticker | Assets under mgt.($ mil.) | MER (%) | Yield to maturity (%) |
|---|---|---|---|---|
| BMO Aggregate Bond Index ETF | ZAG-T | 5,503 | 0.08 | 1.25 |
| iShares Core Canadian Universe Bond Index ETF | XBB-T | 4,371 | 0.10 | 1.29 |
| Vanguard Canadian Aggregate Bond Index ETF | VAB-T | 3,100 | 0.09 | 1.30 |
| iShares Core Canadian Short Term Bond Index ETF | XSB-T | 2,520 | 0.10 | 0.61 |
| BMO Long Federal Bond Index ETF | ZFL-T | 2,279 | 0.22 | 1.08 |
| Horizons Cdn. Select Universe Bond ETF | HBB-T | 1,965 | 0.10 | 1.06 |
| iShares Canadian Corporate Bond Index ETF | XCB-T | 1,615 | 0.44 | 1.84 |
| Vanguard Canadian Short-Term Bond Index ETF | VSB-T | 1,200 | 0.11 | 0.60 |
| BMO Core Plus Bond Fund ETF | ZCPB-T | 1,135 | 0.56 | 1.47 |
| BMO Mid Corporate Bond Index ETF | ZCM-T | 1,048 | 0.33 | 2.02 |
Source: National Bank Financial
Related: Rob Carrick’s 2020 ETF Buyer’s Guide: Best Canadian bond funds
More from Rob Carrick: The stock market rally puts seniors making year-end RRIF withdrawals in a good spot
If you’re looking to claim a capital loss this tax year, read this first
A reader asks John Heinzl: When is the last day I can sell a stock to claim a capital loss for 2020? His response: You must sell a stock no later than Dec. 29 in order to claim a capital loss for the current tax year. That’s because a sale on Dec. 29 will settle on Dec. 31 – the last day of 2020. Capital losses must first be used to offset capital gains in the current year. Any remaining capital losses can be carried back up to three years, or forward indefinitely, to offset gains in those years. Here he answers more tricky tax-loss selling questions.
More from John Heinzl: Tesla, BRP and more investing stars and dogs for the week
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TSX value stocks are on the mend. Here’s why it won’t be just a short-term trend
Unpopular stocks are having their moment, with November gains smashing major benchmarks and leaving Big Tech stocks behind, David Berman writes. How long can this rally last? Clearly, the resolved U.S. presidential election and impressive test results from vaccine candidates have eased market worries. Investor attention has shifted from near-term concerns to the promise of better days ahead.
Laura Lau, chief investment officer at Brompton Funds, believes that Canadian banks stand out with robust dividends and life insurers are still very cheap based on valuations such as price-to-book and price-to-earnings ratios. Even the energy sector, although up 42 per cent in November, looks like it has room to run given that the sector remains 37 per cent below where it began the year. Read more here.
What investors need to know for the week ahead
In the week ahead, Canada’s big banks report their fourth-quarter and year-end results, starting with Bank of Montreal and Bank of Nova Scotia on Tuesday, followed by Royal Bank of Canada and National Bank of Canada on Wednesday, and Toronto Dominion Bank and Canadian Imperial Bank of Commerce on Thursday. Other companies releasing their latest earnings include Lululemon Athletica, Roots, Zoom Video Communications, Dollar Tree, Salesforce and Hewlett Packard.
Economic data on tap include: Canadian building permits and U.S. pending home sales for October (Monday); Canada’s real GDP for the third quarter and September, plus U.S. construction spending for October (Tuesday); Canada’s labour productivity for the third quarter (Wednesday); Canadian and U.S. employment numbers for November plus U.S. goods and services trade deficit and factory orders for October (Friday).
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Published at Sun, 29 Nov 2020 18:34:21 +0000
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