FidelityConnects

Jeff Moore, fixed income portfolio manager, offers his insights on his investment process and where he is finding opportunities in the global bond markets. Jeff first joined Fidelity in 1995, and currently has portfolio management or fixed income subportfolio management responsibilities on 13 funds for Canadian investors. Jeff also shares his thoughts on how President-elect Biden’s first 100 days could impact the markets, and Janet Yellen as his nominee for treasury secretary. Jeff also touches on inflation and ESG investing.

Recorded on December 2, 2020.

Director of Global Macro Jurrien Timmer believes that a vaccine has the potential to help us return to normal in 2021. Going into the election, the focus was on the number of COVID-19 cases and a stimulus package (more cases would require more stimulus), but we have positive news on a vaccine and renewed momentum for another fiscal bridge (of $908 billion). We can now say that what appeared to a total disconnect between markets and the economy in April was not a disconnect, but the market’s anticipation of an economic recovery. There is still a gap, but Jurrien believes the market is fully valued in anticipation of a full reopening in 2021.

Recorded on December 7, 2020.

Portfolio Manager Hugo Lavallée discusses the advantages of active management, his contrarian investing style, and where he is finding opportunities in the current market environment. He also touts the benefits of ESG investing, an area he is very interested in. Hugo considers corrections to be healthy; helping to shake off investors who lack conviction in their strategies or the resources to carry them out, and he uses corrections both to change allocations and to reinvest in his favourite companies. He remains aggressive and is running with less liquidity.

Recorded on December 2, 2020.

Portfolio manager Kyle Weaver seeks out companies that have lower valuations relative to their long-term earnings potential, specifically looking for companies that have a set of secular business model drivers that can grow over a three to seven year horizon. Kyle takes a value approach to growth investing, which includes looking for companies that fit into three categories: hyper-growth companies, strong long-term growth companies, and durable growth companies. Kyle explains how his favourite category are the hyper-growth or “tipping point” stocks such as tech companies currently growing fast but losing money, or early stage biotech companies. In 2019 Kyle joined the team of portfolio managers on the Fidelity NorthStar® and NorthStar® Balanced Fund. In January 2020 his U.S. Growth Opportunities Class was launched for Canadian investors.

Recorded on December 2, 2020.

In the 11th episode of the Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Étienne Joncas Bouchard and Katrina Wilson take a deep dive into Momentum Factor ETFs. This is the fifth and final episode of a five part series called Factors in Focus. Over the past month, Etienne and Katrina offered their outlook on various investment factors, described how they have performed in the past, and most importantly how advisors and investors can incorporate them into their portfolios.

Recorded on December 1, 2020.

Nicole Connolly, Head of ESG and portfolio manager for Fidelity Women’s Leadership Fund, says Covid-19 brought more attention to how companies are treating their employees and customers. ESG has done well through the Covid-19 drawdown and has a lot of momentum going forward. Year to date in the equity space, there are $180 billion inflows into ESG funds globally.  That is more than double the inflow compared to last year.  She reminds investors that ESG simply put is about sustainable investing and sustainable investing allows investors to align their capital with their value, while also providing downside protection, risk management, and opportunity through looking at various ESG factors.  She believes investors are starting to become more educated on ESG.  They understand that they don’t have to sacrifice performance to invest sustainably.  Nicole points out that it’s not too late to invest in ESG and there will be a lot more opportunity to come in the space.

Recorded on December 3, 2020.

Portfolio Manager David Wolf shares his global outlook and fund positioning across asset classes and regions. David also weighs in on changing monetary and fiscal policy, including the recently released Fall Economic Statement from the federal government. David thinks high and rising debt will be a challenge in the future for Canada: the size of Canada’s debt and the rate at which it is growing are among the largest and the highest in the world. Broad debt tends to be a leading indicator of economic stress and asset price stress, and right now, the Global Asset Allocation (GAA) team is looking for exposure outside of Canada. David believes the constraint is going to be inflation; borrowing will become a burden, and the only way out will be to inflate and let prices rise. And, he notes, balanced portfolios are vulnerable to inflation; it is not good for bonds or stocks, or the negative correlation between them. Because of this, the GAA team is moving their defensive position to protected, real assets. David notes that one of the challenges in Canada is a very value-skewed market; there are lots of financials and natural resource companies, which haven’t been the place to be. For value exposure, the GAA team is looking instead to parts of Europe and the emerging markets. They are not entirely bearish on Canada, but believe there are opportunities for returns elsewhere.

Recorded on December 1, 2020.

Looking forward to 2021, Jurrien Timmer, Director of Global Macro, believes we could see the economy running hot to due pent-up demand, as well as possible rotations from growth to value, from U.S. to international markets and from large caps to small caps. There are a lot of questions about what 2021 will look like, and the answers depend on a multitude of factors, including the widespread availability of a vaccine. Jurrien adds that China is leading the global recovery, and China and Taiwan both appear to have returned to pre–COVID-19 levels. Emerging markets are driven by China, which supports emerging markets as a theme for 2021, especially with the U.S. dollar coming down. For more of Jurrien’s research, he can be followed on LinkedIn, or on Twitter @TimmerFidelity

Recorded on November 30, 2020.

In the 10th episode of the Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Étienne Joncas Bouchard and Katrina Wilson take a deep dive into Low Volatility Factor ETFs. This is the fourth of a five part series called Factors in Focus. In this series, Etienne and Katrina offer their outlook on various investment factors, describe how they have performed in the past, and most importantly how advisors and investors can incorporate them into their portfolios.

Recorded on November 26, 2020.

Hon. Rod Phillips, Minister of Finance of Ontario, joins makes his second appearance on FidelityConnects. Minister Phillips notes that the government had to pivot from the original budget scheduled to release in March 2020 due to the pandemic, and now recently released a three-year plan made with contingencies for various scenarios. The government hopes for more stability and clarity by March, in order to continue with the multi-year strategy. The original plan grew to $30 billion in direct support and contingency plans as the year carried on. Ontario’s plan includes massive expenditure into health care, long-term care, tax credits for seniors towards home renovations, and business tax reductions through property, electricity and payroll taxes. Minister Phillips notes that e-commerce and manufacturing appear strong and are greatly contributing towards the Canadian economy. Last year, one in 100 purchases were made online, whereas this year one in eight are. On the manufacturing side of things, more people are working in manufacturing than ever before, which bodes well for the outlook of reinvestment in Ontario. Attendance in auto plants have stayed at 95% throughout the pandemic, and the government is looking at these trends as signals of where to deploy future investment.

Recorded on November 27, 2020.