Joining the podcast today is portfolio manager Hugo Lavallée. For Canadian investors, Hugo manages Fidelity Canadian Opportunities Fund, Fidelity Greater Canada Fund, and Fidelity Climate Leadership Fund. Today, Hugo discusses the extent to which he hears recession concerns within corporations, and how much these concerns might bleed into consumer stocks. Hugo explains to host Pamela Ritchie that markets are unusual right now, because returns are highly concentrated, as is the case with the S&P 500. He says that as a contrarian investor, although his funds have over 100 holdings, he has a higher concentration with the top 10-20 stocks, so his strategy is to see what has been left behind, especially in the Greater Canada Fund. Hugo discusses how Fidelity engages in discussions with companies to encourage them to pivot business models to accommodate an economic environment with higher interest rates. He says companies need to focus on profitability and returning value to shareholders, especially considering they are competing against a risk-free rate of 5%.

Recorded on June 7, 2023.

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