Invesco Canada blog

Insights, commentary and investing expertise

Bitcoin: Digital currency or digital tulip?


December 12, 2017
Subject | Commodities | Institutional | Invesco | Macro views

Now, for the first time, investors are able to purchase futures on bitcoin, the digital currency. The Chicago Board Options Exchange just began offering derivatives contracts which provide the ability to bet on the future price of this cryptocurrency. The CME Group will also be offering derivatives contracts on bitcoin in the coming week. Investors seem to be excited about this opportunity, sending the price of a single bitcoin thousands of dollars higher in the past several weeks in anticipation of the launch of these futures contracts.

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Nine things to watch in November

Despite October’s reputation as a precarious month for stocks, the equity markets made it through the month without so much as a hiccup, let alone a correction. Last month commemorated the 30th anniversary of the 1987 market drop, but investors did not get spooked by the supposed “October effect.” With October behind us, it is now an opportune time to keep in mind some of the things we will want to look for in November and beyond.

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Understanding the ups and downs of commodities


September 26, 2017
Subject | Commodities | Macro views

The past few weeks have seen commodity prices experience some significant swings, with different commodities impacted by different factors. I find that investors have a lot of questions about commodities and what drives them — particularly given all the dramatic weather events over the past few weeks — so this week I’m going to focus on these investments (with a quick note at the end about key events from last week).

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Looking beyond the active-passive debate

Recently, one of Invesco’s funds – Trimark International Companies Fund – was singled out for praise as an example that true active management can outperform. While the kudos were well-deserved for the team, it appeared as part of a commentary that was otherwise unsympathetic to active management.

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Diversification in a post-Brexit world

The basic principle that guides our portfolio construction is combining asset classes that we believe will perform well in at least one of the main economic environments. The goal of this approach is to have elements of the portfolio that are performing well in various scenarios – helping buoy results in more difficult times.

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Gold miner worth the wait

Earlier this month, I attended the opening ceremony of a gold mine in Mexico, along with the governor of Guerrero state, several federal cabinet ministers and the chairman and the CEO of Torex Gold Resources Inc., the company launching the mine. I’ve been investing in commodities for many years, and my focus has always been on high-quality assets run by high-quality people. For me, Torex fits the bill.

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Four reasons why oil prices should normalize


April 25, 2016
Subject | Active management | Commodities | Trimark

When oil is trading at US$20–US$30, many energy companies are not profitable. When oil prices are that low, companies are operating simply to cover their cash costs – it can be very costly to restart a stopped oil well and companies stand to lose less money by continuing to produce, rather than ceasing production altogether.

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The “flywheel” of quality innovation


February 19, 2016
Subject | Active management | Commodities | Trimark

My key investing goal is, and always has been, sustainable growth. In a rapidly changing world, I believe the best road to enduring growth is to embrace change – participate in it and, in some cases, lead the charge. How does a high-quality company do this? I believe it all comes down to building and maintaining a strong culture of innovation.

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Looking for companies that can survive – and thrive – with low oil prices


February 16, 2016
Subject | Active management | Commodities | Invesco

Historically, the Invesco International and Global Growth team has taken an underweight position in the energy sector because we believe that over the course of an economic cycle, few oil-and-gas producers can consistently earn above their cost of capital. Additionally, we see many management teams prioritize volume growth over returns – a strategy that eventually pushes prices down to or below the median break-even cost curve. But after the recent carnage in the oil markets, we’re beginning to dust off some of our energy-company files in search of opportunities.

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Question: What is your outlook on the energy sector?

Our team doesn’t see much benefit in trying to predict volatile commodity prices. Rather, we value natural resource companies using a constant commodity price that tends to focus on the marginal cost of new production. The benefit of this approach is that it cancels out the “cloud of noise” associated with volatile commodity prices.

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Question: How do you view the oil & gas sector today?

Question: With investor concerns about China, interest rates and oil prices taking centre stage and valuations considered fairly valued, how do you view the oil and gas sector today? Are you currently invested in oil and gas companies in Trimark Europlus Fund?

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Iran deal’s effect on oil will be limited

Western sanctions on Iran have been in place since 2011. The country’s current production of ~2.9 million barrels per day (mb/d) is about 800 kb/d to 1 mb/d below pre-sanction levels. With a deal over Iran’s nuclear ambitions now signed, energy investors are trying to determine when physical Iranian barrels will return to the market and what quantity the country can export.

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Finding opportunity in Alberta’s NDP win

The NDP’s majority win in the Alberta provincial election definitely caught me by surprise – and this reaction is clearly visible in the stock market as well, with weakness in energy names across the board in the last few days. The market doesn’t like uncertainty and with this new government in place the policy changes are expected to be gradual so this uncertainty could last for a while.

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The market missed what Shell – and Trimark – saw


April 10, 2015
Subject | Active management | Commodities | Trimark

Royal Dutch Shell PLC has offered to buy BG Group PLC for roughly US$70 billion, an offer that represents a 50% premium to the previous day’s closing price. Prior to the premium, the weight of BG Group in Trimark Resources Fund was approximately 3% and in Trimark Energy Class it was approximately 2%, so this is a significant win for both funds considering the premium being offered to date.

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OPEC decision brings buying opportunities

The Organization of Petroleum Exporting Countries (OPEC) caused commotion in markets last month when it announced its decision to maintain oil production targets despite decreased demand. I believe the decision not to cut oil production is the right call in the longer term.

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