David Cockfield is managing director and portfolio manager, Northland Wealth Management. His focus is Canadian equities.
Power Financial (PWF-T)
Power Financial is a conservatively managed non-bank financial holding company. Companies controlled include Great West Life, London Life, Canada Life, Putman Investments and IGM Financial. With interest in the financial services sector in Canada, the U.S., Europe and Asia, the company is diversified across a number of economies. The company pays a good well protected dividend yielding 4.03 per cent and has a reasonable P/E of 12.32.
Brookfield Property Partners (BPY.UN-T)
Brookfield Property Partners is a global property management company that owns and manages office, industrial, retail, hotel and residential properties worth some $50-billion. The high-quality office properties are located in major cities in the U.S., Canada and Australia. The retail properties are mainly in the U.S. and Brazil. The residential properties are located in North America. Industrial properties are in North America, Europe and China. Hotel properties are in North America and Australia and include casinos. The stock provides a good yield of 5.54 per cent.
BMO Low Volatility U.S. Equity ETF (ZLU-T)
This low volatility BMO ETF provides exposure to a portfolio of low Beta U.S. stocks. Managers select the 100 least market sensitive securities stocks from a universe of U.S. large cap stocks. The portfolio is rebalanced in June and reconstituted in December. The expense ratio is 0.35 per cent and the Beta is 0.74. The breakdown by industry is 25.5 per cent utilities, 24.8 per cent consumer staples, 20.5 per cent health care and 12.0 per cent consumer discretionary.
Past Picks: May 28, 2014
BMO Low Volatility Canadian Equity ETF (ZLB-T)
Then: $21.79; Now: $27.02 +24.00%; Total return: +26.67%
iShares S&P/TSX Capped Energy ETF (XEG-T)
Then: $19.64; Now: $14.29 -27.24%; Total return: -25.76%
Then: $50.68; Now: $54.02 +6.59%; Total return: +10.46%
Total return average: +3.79%
Canadian equity markets are staging a slow recovery from the low reached in December 2014. It continues to be a "two steps forward, one step backward" process. Investors remain very cautious and inclined to hit the sell button quickly. The U.S. equity markets have been performing better, hitting new highs recently. The TSX is still below the levels reached in early September of 2014. With the Canadian economy still in the process of absorbing the shock of sharply slower growth in Alberta, little change is expected in Canada's economic outlook. Canadian equity markets can be expected to continue to provide lacklustre performance with some upward bias.