Globe editors have posted this research report with permission of National Bank Financial. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following text is excerpted from the report:
In this research note, we attempt to differentiate the large-cap, Canadian financial services companies from each other by analyzing their sensitivities to changes in the value of the U.S. dollar and to changes in long-term interest rates.
We conclude that TD appears to be the Canadian financial services company best geared to a scenario of rising interest rates and a rising U.S. dollar.
Sun Life and Manulife would also be good buys if one sought to take a position on a strengthening economic environment in the United States.
We also concluded that banks are generally much more sensitive to a rising interest rate environment than life insurers.
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