Invesco Canada blog

Insights, commentary and investing expertise

2018 Investment Outlook: Meeting the diversification challenge

When traditional asset classes move in tandem, building a diversified portfolio presents a challenge. Duy Nguyen, Portfolio Manager and CIO, Invesco Global Solutions Development & Implementation Team, explains how he will approach portfolio construction in 2018.

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2018 Investment Outlook: European equities: Plenty of scope for active managers to add value

Europe is a rich, highly developed part of the world which is home to a vast range of companies. However, on occasion it still seems to struggle to attract attention from serious investors around the world. There’s always a handy excuse: “Why bother when it’s only a play on more interesting parts of the world?” or “There’s never any earnings growth, is there?” or “Don’t the politics make it un-investable?” Wrong.

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2018 Investment Outlook: China: 2018 growth may moderate, but reforms and innovation bode well for the longer term

Chinese equities caught investors by surprise in 2017 with a strong rally. Contrary to the pessimism over the past few years, investors have turned upbeat towards China, and for good reason: Economic data in general exceeded expectations, and we have seen broad-based earnings growth.

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2018 Investment Outlook: Potential risks facing the markets in 2018

Forecasting is notoriously difficult, and unexpected events can derail even the best educated estimates. Five of Invesco’s global CIOs discuss the most likely risks facing their base-case expectations for market performance in 2018.

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2018 Investment Outlook: Valuations to make 2018 a stockpickers market

The current market rally is one of the longest in history, and valuations in many markets may be stretched. Five of Invesco’s global CIOs explain their views on valuations and which markets might provide opportunities in 2018.

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2018 Investment Outlook: What to expect in 2018

Global markets continued to climb throughout 2017, across virtually all asset classes. Can this performance continue through 2018? Five of Invesco’s global CIOs discuss their base-case expectations for market performance in the year ahead.

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2018 Investment Outlook: Global equities: Risks, uncertainties, and opportunities

Short-term forecasting is a fun, but not often a particularly profitable, exercise. To think one can predict what the next year holds is folly, and to assume you could profit from that prognostication is dubious. In 2016, would you have predicted Donald Trump would be inaugurated in 2017 as the next U.S. president? If so, how would you have expected markets to react? Consider everything we’ve seen in the past year or so:

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2018 Investment Outlook: Global fixed income markets look well-supported by macro factors

Macro

The current investing environment seems daunting. Markets have had a strong couple of years and valuations are tight. At the same time, risks abound. Geopolitical risks including North Korea, terrorism, Brexit and unpredictable politics in Europe and the U.S. make for an uncomfortable investing environment. In such uncertain times, it is important to use an investing framework to help manage through the many risks in the markets, to remind us of the markets’ key driving forces and to help measure the impact of events or potential risks.

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Interest rate outlook: Bank of Canada to pause

After raising the target overnight rate 0.25 percentage points at each of the previous two meetings, the Bank of Canada (BoC) kept the rate unchanged at its meeting on October 25, 2017. While growth has remained strong, it has slowed from the second quarter and the BoC appears ready to give its two previous rate hikes time to filter through the economy before taking further action. Additional uncertainty around the breakdown in North American Free Trade Agreement trade negotiations leaves the BoC cautious regarding future hikes. The Canadian 10-year yield appears to have peaked for the moment and yields have several reasons to fall from current levels, in our view.

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Six things to expect from this international fund


November 9, 2017
Subject | Active management | Trimark

Generally speaking, many of today’s global mutual funds are heavy on U.S. equities, specifically large-cap, blue-chip companies. It is very difficult to outperform passive products with this approach, especially given the low-fee options currently available. Trimark International Companies Fund is different, in this regard and many others.

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Discipline in action: Two companies we like and why


November 7, 2017
Subject | Active management | Trimark

I think it’s important for advisors and investors to truly understand a portfolio manager’s approach, and the best way to do that is to see the discipline in action. In my last blog post, Why EM? Why now? I presented my case for emerging markets and reviewed my approach to investing in these regions. Today, I will discuss two companies we’re invested in, why they made the cut and how they have performed for our investors.

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An optimistic outlook for European stocks


November 6, 2017
Subject | Active management | Invesco | Macro views

Viewed through our Earnings, Quality and Valuation (EQV) lens, the Invesco International and Global Growth team remains optimistic on European equities given the region’s strong fundamentals. Since the second quarter, this trend has been consistent, and although some key metrics (such as retail sales) fell in both July and August, consumer confidence reached its highest level since April 2001, and the European Commission’s Economic Sentiment Indicator is now at its highest level since July 2007.1 This implies that gross domestic product growth in Europe could accelerate toward 3% in the near future.

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Say goodbye to closet indexers


November 1, 2017
Subject | Active management | Institutional | Trimark

I’m writing here in response to questions I’ve received from advisors and to piggyback on comments I’ve made at our recent due diligence events. First, I’m going to dispense with the strict “active vs. passive” construct of the current debate. I’ll make my case for the value of true active management and introduce you to the elements of a portfolio that I believe make it truly active. I’m going to cover a lot of ground here, but I’ll do my best to keep it concise.

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Why EM? Why now?


October 19, 2017
Subject | Active management | Trimark

I’ve said it before, and I’ll say it again: I believe investing in emerging markets (EM) is best done using a truly active approach. Performance numbers tell one part of story – I’ll cover the numbers a little later in this post – but other elements of the “why active in EM” story are: managing risk, long-term growth potential, and understanding complex and unfamiliar local markets.

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Interest rate outlook: Bank of Canada likely to raise rate again

The Bank of Canada (BoC) has hiked interest rates at two consecutive meetings, bringing the overnight benchmark rate to 1.00%.1 GDP growth and employment trends remain strong, while inflation has stayed below the BoC’s 2.0% target. The Canadian 10-year government bond yield has followed an upward trend after hitting its lows in the second quarter. We believe higher rates are likely.

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Currency outlook: CAD rally continues

The Canadian dollar has rallied significantly this year following the Bank of Canada’s (BoC) switch to a hawkish tilt. The combination of reasonably strong growth and the expressed intent of the BoC to remove both emergency rate cuts from 2015 left the market covering shorts in the Canadian dollar. The extreme rally has left the currency susceptible to a short-term retracement, in our view.

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Five trends that could impact global small caps


August 24, 2017
Subject | Active management | Institutional | Invesco

The only constant is change – and the global market is certainly proof of that. As we assess our outlook for the rest of the year, we see several potential changes that could impact international small- and all-cap funds. Here are the five trends we anticipate having the biggest effect – and the ways the Invesco International and Global Growth team is poised to respond.

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Halftime: Mid-year global market outlook


August 11, 2017
Subject | Active management | Institutional | Invesco

In the aftermath of a tumultuous 2016, much discussion has centred around the equity outlook for 2017 and beyond. In fact, the second quarter saw continued strong performance from global markets, though in our view, the long-term earnings outlook remains murky. As we enter the second half of the year, Invesco’s International and Global Growth team assesses global equity performance to date through our EQV (earnings, quality and valuation) lens to identify the key areas to watch – along with potential growth opportunities.

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Interest-rate outlook: Long-term U.S. rates now more dependent on global monetary policy

After hitting lows for the year in June, 10-year government bond yields rose to a two-year high of 1.89% in July,1 as the Bank of Canada (BoC) unsurprisingly increased its benchmark rate from 0.50% to 0.75%.2 The accompanying statement was upbeat as well, brushing off softer inflation numbers as temporary. The BoC’s optimism will probably keep the possibility of another rate hike alive at each of its upcoming meetings. We expect interest rates in Canada to rise from current levels, but we are looking for signs that rates may have topped out in the short term.

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