Art of Boring

Canada-U.S. tariffs are back, and Canadian investors are asking what they mean for their portfolios. Canadian equity portfolio manager Vijay Viswanathan and fixed income portfolio manager Crista Caughlin break down the tariff picture and last month's Canada Investment Summit across stocks and bonds. They cover why the equity portfolio carries little trade-exposed revenue once exempt commodities like oil and potash are set aside, why unemployment matters more than tariffs for Canadian banks, and how a new business-investment tax deduction pulls the effective rate below the U.S. The conversation closes on a simple idea: what the summit needs now is shovels in the ground, not sound bites on TV.

Key Takeaways

The macro backdrop has reversed since 2025: inflation is grinding higher on oil, and the Bank of Canada may hike rather than cut.

The 50% tariff headline overstated reality; USMCA held up and exempt commodities kept trade-exposed revenue low.

About 45% of the Canadian equity portfolio's revenue is CAD and roughly 30% USD, but little is in goods tariffs can easily target.

For banks, unemployment is the KPI that matters; loan losses follow job losses, and diversified business mixes add resilience.

A new tax deduction pulls the effective rate on new investment toward 6% versus roughly 16% in the U.S., but market access still constrains exporters.

The summit's trillion-dollar ambition means a decade of debt issuance, with crowding-out risk against hyperscaler and AI borrowing.

Host: Andrew Johnson, Institutional Portfolio Manager

Guest: Crista Caughlin, Fixed Income Portfolio Manager

Guest: Vijay Viswanathan, Director of Research, Canadian Equity Portfolio Manager

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/

Global credit is absorbing record corporate bond supply as the AI data centre build-out floods the market with debt, yet spreads remain at multi-decade tights. Global credit analysts Sandro Morassutti and Marty Lee revisit the risks the team flagged a year ago, AI-linked issuance, Fed credibility and independence, fiscal spending, and geopolitical risk, and explain why credit spreads have held while government yields have driven the move. They walk through term premium and the long end, why they favour short-dated high-quality credit, the modest duration they have added, and how they are positioned to act when a dislocation finally arrives.

Key Takeaways

AI data centre debt has driven U.S. corporate bond supply to about $1.7 trillion, up 27% year over year and on track for a record.

Despite record issuance, investment-grade spreads sit near 80 basis points and high yield is tighter year to date, at multi-decade tights.

Most of the move in yields has come from government bonds: sovereign yields hit multi-decade highs in the U.K., Japan, and beyond.

The Fed hiked and kept its independence, but credibility and term premium concerns helped push the U.S. 10-year through 5%.

Credit is not directly pricing geopolitical risk; ECB research shows spreads repricing far less than history would imply.

The team favours short-dated, high-quality credit, added modest duration (about 1.2 to just over 2 years), and lifted high yield from roughly 8-9% to 15-16%.

The goal is not to predict the dislocation but to hold the quality and liquidity to buy one.

Companies Mentioned: Amazon, Alphabet, Meta, Oracle

Host: Kevin Minas, CFA, CAIA, Mawer Institutional Portfolio Manager

Guest: Sandro Morassutti, Mawer Credit Analyst; Marty Lee, Mawer Credit Analyst

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/

Is AI compute demand durable? Emerging markets equity portfolio manager Wen Quan Cheong returns from a research trip across Taiwan and South Korea and examines AI chip demand, the semiconductor supply chain, and the companies with the strongest structural tailwinds. He breaks compute demand into training, alignment, and inference, explains why margins can widen further down the AI supply chain, and shares what TSMC, SK Hynix, and Samsung revealed about whether this capital cycle is different from the dot-com boom. He also explains how the team trimmed into a crowded AI trade, and makes the case for a non-AI idea: a port operator in the Philippines.

Key Takeaways

Slowing the pace of AI is partly a safety and alignment story, and alignment work is itself compute-hungry, which could offset a slower training cycle.

Compute demand splits into training, alignment, and inference; inference is skyrocketing with agentic AI, and one lab's training-to-inference mix has gone from ~80-85% training to about 50/50.

AI looks under-penetrated on tokens per user and per agent, the real driver of compute demand, even as user penetration is already high.

Research trips are a deliberate edge; early groundwork let the team act quickly on clean-room contractor Acter.

Margins can widen further down the AI supply chain thanks to consolidation and price-inelastic hyperscaler demand.

TSMC and memory makers point to a stronger foundation than dot-com and multi-year agreements that lengthen the cycle, though overbuilding is still a risk.

A non-AI idea: a Philippine port operator with defensive, price-setter characteristics and a potential Brazil concession as optionality.

0:00 - Introduction: AI Concerns and Emerging Markets 1:30 - AI Safety, Pacing, and What It Means for Chip Demand 5:03 - Three Buckets of Compute: Training, Alignment, Inference 8:23 - Is AI Demand Under-Penetrated? Users vs. Tokens 9:51 - Why Research Trips Are an Investing Edge 15:20 - Acter: The Clean-Room Bottleneck Behind the Chips 16:58 - Why Margins Grow Further Down the AI Supply Chain 18:50 - TSMC and Memory Makers: Is This Cycle Different? 22:54 - Reading the Market Signal in a Crowded AI Trade 25:48 - A Non-AI Idea: A Port Operator in the Philippines 28:12 - Outro & Subscribe

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Wen Quan Cheong, CFA, Mawer Emerging Markets Equity Portfolio Manager

Visit us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

Global equity portfolio manager, Paul Moroz, speaks to a wide range of market topics, including what higher discount rates mean for equity valuations and the subtle shifts you might not see in the headlines but that absolutely matter.

Stay tuned for the second half, where Paul discusses Millennium Prize math problems, humility, podcast proliferation, and entropy—for those seeking useful mental models for portfolio construction, the payoff is worthwhile.

Key Highlights:

Bond yields set the discount rate for every asset, and the 10-year U.S. Treasury is above 5%.

A 1% rise in the discount rate implies roughly a 15% decline in equities, yet markets are near highs.

NVIDIA at 13 times next year's earnings suggests multiples compressed while earnings carried prices.

Positioning has moved toward rate beneficiaries and away from consumer discretionary.

A portfolio should work like a rope, with many independent strands so no single one carries the load.

Most of what an investor sees is noise; the work is putting energy into the part that matters.

0:00 - Introduction: Rising Bond Yields and Record Highs 1:11 - Why Equity Markets Keep Climbing the Wall of Worry 3:30 - Are Corporate Earnings Just AI? 4:45 - Bond Yields, Discount Rates and the 10-Year Treasury 7:55 - The Equity Duration Math: 1% in Rates, 15% in Stocks 9:32 - NVIDIA at 13 Times Earnings: Growing Into Valuations 11:19 - How Higher Rates Changed the Portfolio 13:38 - Building a Portfolio Like a Rope 16:06 - Humility as an Investment Process 18:45 - ChatGPT Solves a Millennium Prize Problem 23:00 - Entropy Explained: Perfume, Lawns, and Chaos 24:49 - Podcast Proliferation and the Nash Equilibrium 27:40 - Knowledge Adds, Wisdom Subtracts 29:10 - Outro and Subscribe

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Paul Moroz, CFA, Mawer Portfolio Manager

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

Private equity is opening up to individual investors, and the line between public and private markets is blurring. In this episode, private investments portfolio manager Peter Lieu and institutional portfolio manager Kevin Minas break down secondaries and continuation vehicles, the difference between IRR and distributions, and how Mawer built institutional-quality private equity access through fund commitments, co-investments, and vintage-year diversification, including a new mutual fund trust for registered accounts like RRSPs and TFSAs. 0:00 - Introduction: Private Equity Beyond Endowments and Pensions 1:30 - A Brief History of Private Equity Allocations: Yale to the Maple 8 2:58 - Public-Private Convergence: Why Companies Stay Private Longer 6:17 - Secondaries and Continuation Vehicles Explained 9:40 - IRR vs. Distributions: The Delayed-Exit Debate 13:45 - Bringing Private Equity to Retail: Institutional-Quality Access 15:14 - Co-Investments and 50 Years of Business-Model Analysis 18:25 - Why a Mutual Fund Trust for RRSPs and TFSAs 20:22 - Liquidity and Redemption Windows in a Semi-Liquid Structure 22:21 - Private Equity Returns in a Higher-Rate World 26:06 - What's Next: Sports, Live Entertainment, and Democratization 32:13 - Outro & Subscribe

-The line between public and private markets is blurring. Companies are staying private longer, more financing is available without an IPO, and public companies are increasingly being taken private, so accessing value early in a company's life increasingly depends on having private equity exposure.

-Continuation vehicles are the modern version of the secondary buyout, not a new idea. They let a manager hold a strong business for longer, and roughly 90% of LPs who can roll into the new vehicle choose to take liquidity instead, which creates both a conundrum for investors and an opportunity for disciplined buyers.

-Distributions matter as much as IRR. IRR assumes capital is reinvested at the same rate and can look healthy even when little cash has been returned, so the team evaluates managers on money multiples and cash back, not IRR alone.

-Mawer built its access the way large institutions do. The program pairs fund commitments for diversification across companies, geographies, sectors, and vintage years with no-fee, no-carry co-investments, where the firm applies 50 years of business-model analysis to a single company decision.

-Registered accounts and private equity are naturally aligned. A new mutual fund trust extends the strategy to RRSPs, LIRAs, and TFSAs, where long time horizons and capital that is already locked up match the illiquidity of the asset class.

-Recent returns have been weaker as higher rates pressured valuations and exits slowed while public markets outperformed, but the long-term value drivers remain in place, and a staggered deployment that began in 2022 positioned the strategy for a constructive backdrop.

Companies and Assets Mentioned: SpaceX, Amazon, Alpine F1 team, University of Utah Athletics, RedBird Capital, Otro.

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Kevin Minas, CFA, MBA, CAIA, Mawer Institutional Portfolio Manager

Guest: Peter Lieu, CFA, Mawer Portfolio Manager, Private Investments

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

AI CapEx is on track to reach roughly $700 billion at the four largest hyperscalers this year, and equity analyst Irena Petkovic breaks down where all that money is going and what has to be true for it to earn a return. She explains how data centers turned from cost centers into revenue-producing AI factories, the four ways hyperscalers monetize compute, and how the token economy actually works. She then weighs the early evidence of returns against the risks around token pricing, debt financing, and public backlash, and describes how the team positions the portfolio around it.

0:00 - Introduction: The $700 Billion AI CapEx Question 1:29 - How Big Is the Spend? Apollo, Telecom, and Railroads 4:11 - Data Centers as AI Factories: From Cost Center to Revenue 5:53 - Four Ways Hyperscalers Monetize Compute 7:10 - The Token Economy Explained 11:26 - Early Evidence of Returns on AI Investment 14:39 - The Bear Case: Token Prices, Debt, and Backlash 18:49 - Positioning the Portfolio Around AI 20:35 - Outro & Subscribe

Highlights:

• Hyperscaler AI CapEx of about $700 billion this year is a scale rivaled historically only by the railroads.
• Capital intensity at Microsoft, Meta, Google, and Amazon has jumped from 5-10% of revenue to upwards of 45%.
• A high return on invested capital justifies spending down free cash flow rather than protecting it.
• The data center is now a revenue-producing AI factory that turns electricity and chips into sellable tokens.
• Compute is monetized four ways: GPU rental, productivity products, enhancing own businesses, and selling tokens.
• Early returns look encouraging, with sub-three-year hardware payback cited and demand exceeding supply.
• Risks to watch are token prices falling faster than volumes and a shift toward debt-funded build outs.

Host: Rob Campbell, CFA, Mawer Institutional Portfolio Manager

Guest: Irena Petkovic, CFA, Mawer Equity Analyst

This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

How do you value a memory semiconductor stock like SK Hynix when no one can predict DRAM prices? Equity analyst Shan Rui Yeo walks through the team's Monte Carlo valuation framework: a discounted cash flow run through thousands of scenarios that prices the business on a distribution of returns rather than a single forecast. He also explains how two-times leveraged single-stock ETFs have been amplifying SK Hynix's daily price swings, why regulators and Korean brokers are responding to retail leverage, and why flow-driven volatility can be a gift for long-term investors. The through-line: memory can be cyclical, structurally growing, and wealth-creating all at once. 0:00 - Introduction & Disclaimer 0:21 - How Do You Value a Memory Stock Amid Huge Uncertainty? 0:54 - Monte Carlo Valuation: Pricing SK Hynix on a Distribution of Outcomes 5:27 - Day-to-Day Volatility: Fundamentals or Flows? 6:17 - How 2x Leveraged Single-Stock ETFs Amplify SK Hynix Price Swings 9:40 - What Investors Underappreciate About the Memory Industry 10:21 - Closing Thoughts & Subscribe

Key Takeaways

• Key uncertain variables (DRAM prices, supply response, China risk) are modelled as ranges and run through thousands of scenarios; the output is a distribution of returns, treated stochastically.
• SK Hynix scenarios: bull (prices hold through the decade), realistic (decline from 2028 as supply arrives), bear (accelerated decline on over-investment and Chinese supply).
• The test is being paid adequately across the whole distribution, not picking the right scenario; the distribution centred around 12% with positive skew.
• New data points (LTAs signed, capacity expansion) update the distributions; position sizing follows the shape, and the team trimmed as the shares ran.
• Two-times leveraged ETFs rebalance by buying after rises and selling after falls, amplifying 10 to 15% daily moves in SK Hynix.
• Flow-driven volatility widens the gap between price and value, which long-term investors can use.
• Memory can be cyclical, structurally growing, and wealth-creating at the same time.

Host: Rob Campbell, CFA, Institutional Portfolio Manager Guest: Shan Rui Yeo, CFA, Equity Analyst This episode is available for download anywhere you get your podcasts. Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/ #ArtOfBoring #MawerInvestmentManagement #MawerInvestment #Podcast #Finance #Investing #semiconductor #tech #techexplained #memory #skhynix

Memory has been one of the strongest corners of the semiconductor industry, and strong returns invite hard questions. In the second part of this series, equity analyst Shan Rui Yeo examines the main risks to the memory thesis: rising competition from China's CXMT and YMTC, the technologies that could reduce AI's appetite for memory, and the wave of capacity investment that could eventually tip the industry back into oversupply. He weighs each risk against the constraints holding it back, from equipment export controls to limited EUV supply, and notes that memory companies already trade at three to five times forward earnings. The conversation closes on a working principle: treat the terminal value as a distribution, not a fixed number. Key Takeaways

• China's CXMT is expanding DRAM capacity aggressively, but export controls on sub-18 nanometre equipment and EUV keep its effective supply share (about 10%) below its capacity share (about 15%).

• YMTC is the more credible technological threat: NAND density comes from stacking layers, and its Xtacking hybrid bonding architecture is proprietary.

• Efficiency gains may grow memory consumption rather than reduce it; cheaper tokens get spent on larger context windows (the Jevons paradox).

• The deepest risk is architectural: if large language models are not the path to AGI, the next paradigm may not be memory hungry, so terminal value is a distribution, not a fixed number.

• Announced capex is enormous but back-loaded into the 2030s, and EUV and equipment capacity are the bottleneck to bringing it online.

• Memory companies trade at three to five times forward earnings; the market is not assuming supernormal profits forever, and the NAND supply outlook is better in the near term.

Companies Mentioned: Samsung, SK Hynix, Micron, CXMT (ChangXin Memory), YMTC (Yangtze Memory), Apple, NVIDIA, Google, ASML, Applied Materials, KLA, Lam Research, TSMC, Intel, Kioxia Host: Rob Campbell, CFA, Institutional Portfolio Manager Guest: Shan Rui Yeo, CFA, Equity Analyst

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/

One of the defining market stories of the past 12 months has not been AI chips that compute, but the chips that remember. Equity analyst Shan Rui Yeo explains how memory works, from DRAM and NAND to high bandwidth memory, and how an industry that destroyed wealth for four decades became disciplined after consolidating to three players in 2013. He then walks through what changed: AI inference has made memory the key bottleneck, memory content is climbing with each new generation of GPUs, and new supply takes three to four years to build. With prices up sharply and customers signing long-term agreements, Part 1 of this three-part conversation lands on a commodity industry whose business model is changing in real time. Key Takeaways

• Memory is a commodity with a three-to-four-year supply lag, which is why the cycle has always been difficult.
• Consolidation to three players in 2013 turned four decades of wealth destruction into at least 15% returns on capital through the cycles.
• In AI inference, memory bandwidth sets the speed of token generation, making memory the key bottleneck.
• NVIDIA's Rubin GPU carries 384 GB of DRAM, the equivalent of 32 iPhones per GPU, or 160 million iPhones across five million GPUs.
• HBM consumes three times the wafer capacity of standard DRAM (four times with HBM4) and is forecast to absorb 30% of DRAM wafers by 2027.
• DRAM contract prices are up roughly 200% year to date and 400 to 500% year over year, and price increases are reaching phones, laptops, and consoles.
• Customers are signing three-to-five-year agreements with prepayments, which could support a re-rating of memory companies.

Companies Mentioned: Samsung Electronics, SK Hynix, Micron, NVIDIA, Intel, Texas Instruments, Apple, Nintendo Host: Rob Campbell, CFA, Institutional Portfolio Manager Guest: Shan Rui Yeo, CFA, Equity Analyst

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at: https://www.youtube.com/@MawerInvestment https://www.mawer.com https://www.linkedin.com/company/mawer-investment-management/ https://www.instagram.com/mawerinvestmentmanagement/

#ArtOfBoring #MawerInvestmentManagement #MawerInvestment #Podcasts

Canada has spent a generation underinvesting in the infrastructure and resources that underpin its economy, and that may be starting to change. Canadian small cap equity analyst Dominic Drzazga examines the Build Canada theme: what it actually means beyond the headlines, and what has shifted since the federal election. He walks through the legislative groundwork, from the Building Canada Act to a fast-tracked pipeline of named projects, and explains why the clearest near-term opportunities potentially sit in the middle of the value chain rather than with the eventual asset owners. Above all, he frames Build Canada as a long-horizon shift, one where the discipline is separating the projects that break ground from those that stay on the press release. Key Takeaways

• What the Build Canada theme really means, beyond physical infrastructure to Canada's untapped resources and human capital.
• The legislative changes since the election: the Building Canada Act, faster approvals, and the new Major Projects Office.
• The project pipeline taking shape, from LNG Canada's Kitimat expansion to Ontario Power Generation's small modular reactors.
• Why the near-term beneficiaries are in the middle of the value chain, not the eventual asset owners.
• How the portfolio is positioned: Bird Construction, Dexterra Group, and Black Diamond.
• The key risks: projects that stall, and cost and schedule overruns, and how the team manages them.

Companies Mentioned: Bird Construction, Dexterra Group, Black Diamond Group, Aecon, Dow Host: Kevin Minas, CFA, CAIA, Mawer Institutional Portfolio Manager Guest: Dominic Drzazga, CFA, Mawer Equity Analyst

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") 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 us at:

https://www.youtube.com/@MawerInvestment

https://www.mawer.com

https://www.linkedin.com/company/mawer-investment-management/

https://www.instagram.com/mawerinvestmentmanagement/