David Cockfield is managing director and portfolio manager, Northland Wealth Management. His focus is Canadian equities and ETFs.
Bank of Montreal (BMO.TO)
Canada's fourth-largest bank with branches across the country, BMO is also Canada's oldest bank. It has significant operations in the U.S., including Harris Bank in Chicago. The bank pays a good dividend yielding 4.28 per cent and has not missed a dividend payment since 1829. Last purchased in October at $76.73.
iShares Trust- Shs S&P GSTI Technology Index Fund (IGM)
This ETF tracks U.S. technology stocks as represented by the S&P North American Technology Sector Index. The top five holdings are Microsoft, Apple Inc., Facebook, Amazon and Google. The expense ratio is a reasonable .48 per cent. This ETF has gone sideways for seven months and now seems poised to break out. The tech sector should perform well in a growing U.S. economy. Last purchased in October at $108.00.
BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.TO)
This ETF attempts to replicate the performance of the MSCI Europe Quality - 100% hedged to Canada Index. The main geographic allocations are the U.K. at 40.7 per cent, Switzerland at 23.1 per cent and Germany at 9.5 per cent. The main industry concentration is consumer staples at 28.7 per cent, health care at 23.1 per cent, consumer discretionary at 17.3 per cent and industrials at 14.3 per cent. We feel European equities offer good value, particularly in the countries and sectors represented in this ETF. The ETF also offers excellent diversification at a reasonable cost of .46 per cent. Last purchased in October at $17.00.
Past Picks: December 5, 2014
Pembina Pipeline (PPL.TO)
Then: $39.99 Now: $33.94 -15.13% Total return: -11.44%
Crescent Point Energy (CPG.TO)
Then: $26.69 Now: $18.21 -31.77% Total return: -26.04%
Brookfield Properties Partners (BPY_u.TO)
Then: $26.33 Now: $30.83 +17.09% Total return: +21.26%
Total Return Average: -5.41%
After a double bottom in August and September, North American equity markets have moved upwards. We believe investor concerns regarding China's growth are overblown. As a managed economy, the Chinese government has significant ability to stimulate their economy both through fiscal and monetary means. Fundamentals in the U.S. remain positive, while the European economies will soon see more stimulation. With this background, equity markets should continue their recovery. With Federal Reserve rate increases on the sidelines, interest rates will continue at present low levels.