Dan Rohinton, portfolio manager, iA Global Asset Management
FOCUS: Canadian, global large caps
Top Picks: LVMH Louis Vuitton, Visa, TransDigm Group
MARKET OUTLOOK:
We have observed a relatively robust U.S. and global economic backdrop and central banks are now shifting towards an easier money path, albeit at different speeds. I expect this pace of easing to be generally supportive of markets absent a specific shock event.
Recent efforts by China to revive its economy have also been constructive for the global economic backdrop. It’s critical that China succeeds in these monetary and fiscal initiatives as they will have a significant impact on demand for commodities around the world, especially those coming from the Canadian market.
Specifically, we have seen a significant rise in valuations across different yield-oriented sectors as investors have correctly taken the cue that interest rate cuts will drive a valuation uplift. I expect this trend to continue for the foreseeable future as investors will be forced out of guaranteed products such as high-interest saving accounts (HISAs) and guaranteed investment certificates (GICs) in favour of quality dividend-paying equities.
The AI theme continues to broadly remain in focus as well with high expectations across the larger firms investing in artificial intelligence. We remain in search of the killer product that can help drive monetization into full swing. We remain positioned in a balanced way across the AI theme.
To put it all together, navigating the upcoming market requires a keen focus on individual company fundamentals while also navigating the cross-currents across the global economy. This balanced strategy should serve investors well in making informed decisions in the existing market landscape.
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TOP PICKS:
LVMH Louis Vuitton (MC EPA) – Paris exchange
Leading global luxury brand conglomerate across the globe. It owns global leader Louis Vuitton along with other exposures across different categories including alcohol and jewellery.
The stock has seen a significant recovery in the past week as investor sentiment around China has improved considerably as the local government introduced measures to stabilize the economy. For higher risk-tolerant investors this one could make sense.
Visa (V NYSE)
Global leader in the payment network duopoly with peer Visa, a long-term beneficiary of the cash-to-card and digitization of payments secular trend. Recent anti-trust lawsuit around monopolistic behaviour on the debit side creates an opportunity to dollar cost average down on this high-quality company.
TransDigm Group (TDG NYSE)
Leading aftermarket pure-play entity that services customers around the world. Unique position in the value-chain servicing non-mission critical parts that are sole source or spec’d in at the onset of the aircraft’s creation. Exceptionally well managed with a long history of doing attractive acquisitions or returning capital back to shareholders.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MC EPA | N | N | Y |
| V NYSE | N | N | Y |
| TDG NYSE | N | N | Y |
Past Picks: JULY 25, 2024
Linde PLC (LIN NASD)
- Then: US$443.03
- Now: US$476.25
- Return:7%
- Total Return: 8%
Mastercard (MA NYSE)
- Then: US$429.60
- Now: US$494.15
- Return:15%
- Total Return: 15%
TRYG A/S (TRYG CPH) – Copenhagen exchange
- Then: DKK 147.60
- Now: DKK 159.30
- Return:8%
- Total Return: 8%
Total Return Average: 10%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| LIN NASD | N | N | Y |
| MA NYSE | N | N | Y |
| TRYG CPH | N | N | Y |
