FidelityConnects

In the second episode of the Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Mike Riccio and Etienne Bouchard debunk some of the common myths surrounding ETFs. Mike and Etienne note that ETFs are sometimes misunderstood and they come across myths about ETFs that are simply not true, such as ETFs are exclusively passive investments, ETFs are investments solely used by high risk investors, ETFs are speculative investment vehicles, as well as ETFs accentuate market downturns through broad based selling.

Recorded on June 10, 2020.

L’investisseur à contre-courant Hugo Lavallée expose ses perspectives sur les occasions de placement en accord avec son mandat à la lumière de la réouverture des économies. M. Lavallée investit à la fois dans des titres de valeur et des titres de croissance, et il peut favoriser l’une ou l’autre de ces catégories. L’évolution de la pandémie a bien servi son style de placement, qui consiste à chercher de bonnes entreprises aux prises avec des difficultés temporaires (trimestres ou années difficiles). Alors que les événements défavorables vont et viennent, ce qui a un effet sur la volatilité actuelle, M. Lavallée s’intéresse plutôt à l’avenir. Ses principaux placements en ce moment se composent de sociétés qui vendent des articles de faible valeur, comme Five Below, Dollarama et Chipotle. M. Lavallée s’intéresse surtout aux placements liés à l’environnement (le « E »), mais il constate que ses collègues de Fidelity font de l’excellent travail dans les secteurs de l’investissement socialement responsable et de la gouvernance (le « S » et le « G »). Il est important également de rappeler que Fidelity a sa propre cote ESG et qu’elle ne se contente pas de suivre les évaluations de MSCI.

Date : 12 juin 2020

Our expert panel for today’s podcast features Andrew Clee, VP, ETFs, Fidelity Investments Canada, Jing Huang, Director, BMO Capital Markets, and Andres Rincon, Director, ETFs, TD Securities. The panel discusses the fastest growing trends in the market, how to build your ETF strategy, and maximizing ETFs to tackle ongoing market volatility. April saw low inflows into ETFs of $650 million, but May saw inflows increase significantly, up to $2.5 billion, and a resumption of risk-on trading. Andrew and his associates note that advisors are inquiring about specific asset classes, with lots of interest in commodity-based ETFs and gold, and that they have recently seen a lot of smaller names in the gold space adding value to portfolios. The last 13 years have seen a trend in growth, but value is starting to take over. In keeping with this trend, Fidelity launched value and momentum factor ETFs on June 10.

Recorded on June 11, 2020.

Mark Schmehl, portfolio manager, observes that things are getting better, but the real question on everyone’s mind is how quickly things will recover. For Canadian investors, Mark manages Fidelity Global Innovators® Class, Special Situations Fund, and Canadian Growth Company Fund. Mark reflects on his investments and how his funds have performed through the crisis. Mark believes a lot will change over the next 12–18 months, and he is trying to determine which companies will benefit from these changes and which ones may lose out. When speaking to management teams, he is focusing on the trends they are seeing among their customers: whether consumer behaviour generally has changed, whether there are any data that companies are finding surprising, and whether a change in customer behaviour has affected business. 

Recorded on June 10, 2020.

Fixed income portfolio managers Sri Tella and Catriona Martin are cautiously optimistic about the recent reopening news, and are watching to see whether the consumer bounces back. Moving to a reopening phase is important to continue building confidence, but while indexes have improved significantly, and we are beginning to see people go back to work, we need continued support in moving through the ongoing volatility. Sri and Catriona are looking at unemployment rates, liquidity runway for companies, and high-frequency indicators (e.g., number of people driving). Sri and Catriona note there have been opportunities among both high-quality and high-yield names, and spreads had been the tightest seen during the current business cycle prior to the crisis. Catriona used wider spreads to increase exposure to high yield. 

Recorded on June 9, 2020.

Fidelity’s directors of research Joe Overdevest and Lucas Klein share their outlook on North America and equity markets as investors try to weigh the long-term impact of reopening plans and fiscal responses. Joe and Lucas have been watching sectors and market trends, and reflect on financials, big pharma, inflation, housing and real estate, among other topics. Joe notes that he is currently most excited about financials and resources, but because of the breadth of the Fidelity research teams, they are able to find opportunities in almost every sector. Joe believes that there is a very low probability that Canadian banks will make dividend cuts, and from a sector perspective, the portfolio managers are seeing more attractive opportunities in this sector than they have for the last couple of years. And in the U.S. financial market, Lucas notes, brokers are down to less than one times tangible book; at recessionary levels like this, it makes sense to invest in banks.

Recorded on June 5, 2020.

Jurrien Timmer, Director of Global Macro, provides his weekly global macro update. The market had priced in a much worse outcome than what we are getting, and earnings for 2020 are now flattening. Jurrien believes either prices are too high, and needs to correct downwards, or earnings estimates need to inflect higher. Jurrien notes that pieces have begun to fall into place to make what we’re seeing look like a cyclical bull market. We’re also seeing people fight the rally, but this could be a good thing if it continues to provide fuel for the market to go higher while people sit on the sidelines. A declining U.S. dollar is also a bullish development, as a strong dollar suggests liquidity squeeze, which isn’t favourable.

Follow @TimmerFidelity on Twitter for Jurrien’s comprehensive charts and graphs. 

Recorded on June 8, 2020.

Jason Kenney, Premier of Alberta, Travis Toews, Minister of Finance and Treasury Board, and Tanya Fir, Minister of Economic Development, Trade and Tourism, join host Pamela Ritchie to address the recovery in the province and the outlook on oil. The Premier estimates that it will take around 12–18 months before the excess inventory of oil will be drawn down to lower levels; for now, he is hoping that the market can get back to around $40/barrel, which is about a breakeven price. All in all, he believes that people should be bullish in the mid- to long term on Canadian oil, because Canada is more capital efficient, and competition is getting shut out. In addition to discussing an oil and gas outlook, the Premier and Ministers speak about the province’s global diversification strategy, immigration, tourism, co-operation across provinces during the coronavirus pandemic, and ESG performance of Canadian oil and gas producers.

Recorded on June 4, 2020.

In the inaugural episode of The Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Mike Riccio and Etienne Bouchard get to know Bobby Barnes, Quantitative Analyst at Fidelity Investments in Boston. This series will dive into the world of ETFs, and in today's episode, Mike, Etienne and Bobby discuss factor investing. Bobby also explains how quantitative analysts differ from a fundamental analyst, and how his research and analysis of how factors perform throughout the business cycle is used in portfolio construction. On June 10, 2020, Fidelity Canada introduced two new factors, Value and Momentum, to complement the existing suite of Dividend, Low Volatility and Quality Factor-based strategies. An efficient complement to a well-diversified portfolio by offering targeted single-factor exposures.

Recorded on June 1, 2020.

Portfolio manager David Wolf shares his outlook on global asset allocation strategy and how investors could position their portfolios to weather the unprecedented challenges brought on by the coronavirus pandemic shock. David, a former advisor to the Governor of the Bank of Canada, manages over $65 billion in assets as part of the Global Asset Allocation (GAA) team. He notes several themes in the economy right now, including the “Main St. vs. Wall St.” story, that policy responses to the pandemic mean governments are running deficits, and the highest unemployment rate since the Great Depression. David also examines how stock markets nearing record highs are presenting a market dichotomy: a buoyant stock market, but the worst economy in years. Also, that we’re seeing economic shocks, particularly to small businesses.

Recorded on June 4, 2020.