FidelityConnects

Today we check in with Fidelity Director of Global Macro Jurrien Timmer as he discusses the latest developments from the Federal Reserve’s policy meeting, how alternatives may fit in your portfolio, and if we are in fact in a bear market bounce. The Federal Reserve left rates unchanged at the end of its policy meeting last week. The Fed acknowledged that there are various lag effects, and that inflation is coming down signaling a pause and the need to become more data dependent. Jurrien says the narrative has moved on from this to the term premiums in the bond markets and how far the bond yields must go, and what is the interplay between monetary and fiscal policy? He adds rising rates and rising term premium has brought down the PE for the stock market, and so as rates start coming down, this has created a big sigh of relief in the equity markets. urrien says bond yields are currently at 4.64% and that could be split into two parts, the risk neutral rate and the risk premium. The term premium has dramatically flipped since 2020. It was -1.45% three years ago and reached as low as -9%. A few months ago, it was as high as 0.5%. Jurrien also comments on the Magnificent Seven, alternatives in your portfolio and the transition away from the Great Moderation regime.

Recorded on November 6, 2023.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

Today on the show, we welcome ETF Strategist Étienne Joncas Bouchard as he breaks down the latest ETF trends, including investing trends for the remainder of the year. Étienne gives an overview of the growth of ETFs in Canada. Last year, there was $35 billion in net new assets. As of September of this year, we are at $30 billion for the industry, which is dominated by the fixed incomes, mostly cash alternatives such as HISA ETFs and MM. He notes there has been significant growth in the active side of ETF industry over the past couple of years. Étienne points to a survey done by a discount broker in the US reports that 89% of millennials own ETFs and it’s their vehicle of choice. And more than 60% of baby boomers would use ETFs as their vehicle of choice. Taking a look at US equities, Étienne says in terms of performance it has been pretty good when you look at the benchmark. He says we’ve seen double digit returns so far this year on the S&P500, but a big concern is the lack of breadth. There are fears that this index is too concentrated and is really pulled up by the magnificent seven stocks. Those stocks represent 95.6% of the YTD total return of the index as of October 20th. Étienne also touches on the volatility of the bond markets, factor investing, and all-in-one- ETFs.

Recorded on October 27, 2023.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

Today on the show, we welcome renowned economist Don Drummond who discusses the Bank of Canada’s latest interest rate decision as well as the overall health of Canada’s economy. Don has held several senior roles at the Federal Department of Finance, including Associate Deputy Minister, where he was responsible for economic analysis, and fiscal and tax policies. Don and host Pamela Ritchie discuss the Bank of Canada’s decision to hold the key interest rate at 5%. Don says the key thing now is how the BoC revises inflation. He’s concerned with the zero-level output gap we’re coming to where excess demand was slightly greater than supply, but how is nearing a zero gap. He believes we need to create slack in our economy. Right now, the economy is sitting right on its supply capacity so there is currently no slack to rely on. The housing market can help with this, but right now the market is showing resilience. Still lots of demand for houses and still alot of people coming into Canada looking for homes.

Recorded on October 26, 2023.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

Today on the show we welcome institutional portfolio manager Mike Hickey. Mike and host Pamela Ritchie discuss a range of topics including investing in Japan, the demand for AI and the state of the consumer. Mike says inflation is coming down and notes that the sweet spot for equities is around 3% inflation. Revenues are nominal and he says a little bit of inflation is good for corporate America. He adds that they are focused on growth, and tend to be biased to sectors in tech, consumer space , and healthcare. These areas, he says, have characteristics of high growth and are global businesses. They are very scalable and are capital light and not so affected by interest rates because of a massive balance sheet. Mike who has worked alongside long-time investor Will Danoff for many years says in terms of value versus growth, they are always biased to growth. They are willing to pay for good names that might look expensive. He adds we are still in the early days of corporate America embracing AI, but if you’re worried about a company being too expensive to invest in, you may miss out on some big moves.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

Today on the show we welcome Michael Brooks - CEO of REALPAC, and Tim Hudak - CEO of the Ontario Real Estate Association. Together, they discuss the present state of Canada’s housing market, highlight future trends, as well as affordable housing solutions. Brooks and Hudak explain to host Pamela Ritchie the path that led to our country’s current housing situation, shedding light on influential factors such as the rate of home construction and the influx of immigrants. To add to that rising interest rates have halted housing development, and immigration numbers continue to rise in Canada. They also discuss necessary policies and systems that could be implemented to enhance our economy. They explain the need for an across-the-board solution. Many individuals without rental alternatives often turn to non-profit or social housing, which could potentially lead to more challenging living conditions. Many of these discussion points can be found in Hudak and Brooks’ report ‘The Multi-Sector Approach', which looks at the factors driving the national housing crunch, and their recommendations to improve the situation.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

On today’s show, we chat with Portfolio Manager Dan Kelley as he provides an overview of founder-led companies, outlining their differences, risks, and his own predictions for their growing evolution. Dan explains that a successful founder must have a long-term focus on the firm they are growing, be able to see beyond just the market numbers, and provide a unique service or product to customers to stand out. In the last couple of years, Dan says, we have been able to see founder-led companies get a full economic cycle, which included a secular low in interest rates and lots of fluid aspects and dispersion in returns. Dan particularly has invested in many founder-led sectors within the Russell 3000, with some of the biggest drivers in these sectors being healthcare and biotech. He mainly invests in public equities that are later in their development, and many of those relationships stem from his professional or personal circles. Not all of these companies are American in his portfolio, as 10% come from Canada or Europe. Dan believes that founder-led companies need to be adaptable and keep up with their ever-changing environment in order to maintain a consistent level of growth. He also discusses the process for selling the companies, what happens when a founder moves on from the company or passes away, and the role of AI for acquiring market share.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

Today on the program, we welcome VP of Products Andrew Clee to the show. Andrew gives listeners an overview of the markets – where we are at, why we’re in the most “discounted recession” in history and how the US and Canadian economies differ at this time. As the year slowly wraps up, Andrew reflects and says 2023 was all about inflation, interest rates and an impending recession. But interestingly, you put them all together and the Nasdaq is still up 30%, S&P 15% so risk assets are still behaving and so there is a lot of negative headlines in the market. He adds this is the most “discounted” recession in history because historically you didn’t really know that we were going into a recession, but now everyone expects it and is waiting. But the recession will be influenced by rates. If interest rates are higher for longer, Andrew says consumers will have to dial back their spending behaviors which will hurt the economy. Andrew touches on the housing situation and mortgage market in Canada and the US. In the US the mortgage is fixed and non-portable, whereas in Canada rate resets every 5 years and is portable. He adds the US consumers don’t really care except if you are looking to move or buy a new house, they only care about their lifestyle choices versus in Canada we care about when interest rates go up.

Recorded on September 25, 2023.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.

On today’s episode, Portfolio Manager Patrice Quirion who manages Fidelity Global Concentrated Equity Fund and Fidelity International Concentrated Equity Fund puts Global equities into focus. Patrice touches on inflation and says there is still work to be done to erase the perception of high inflation. This could mean to go higher or stay for a longer period. But Higher rates remain dependent on how the economy fares and if we see things deteriorate. And The risk-reward around cost of capital may cause defensive sectors to be more attractive with a slowing economy as well as bond proxies to be in a portfolio. As a contrarian investor, Patrice, says there might not be an outright dislocation but a more compelling risk-reward in parts of the market. He adds it would make sense to get into a defensive position where he can pull when it’s time to get into the offence. Patrice says the risk profile for equities is still higher than fixed income, but the compounding returns is more favorable, even on defensive stocks. He adds Dividend yields are still a little lower than long term bond yields; however, these companies are still going to grow long-term, but not at growth stock levels such as 10 percent.

Recorded on October 16, 2023.

At Fidelity, our mission is to build a better future for Canadian investors and help them stay ahead. We offer investors and institutions a range of innovative and trusted investment portfolios to help them reach their financial and life goals. Fidelity mutual funds and ETFs are available by working with a financial advisor or through an online brokerage account. Visit fidelity.ca/howtobuy for more information.

For the second year in a row, FidelityConnects by Fidelity Investments Canada was ranked the #1 podcast by Canadian financial advisors in the 2022 Environics’ Advisor Digital Experience Study.