Invesco Canada blog

Insights, commentary and investing expertise

What does MSCI’s China A-Shares decision mean for investors?


June 26, 2017
Subject | Institutional | Invesco | Macro views

After four years of discussions, on June 20, 2017, MSCI announced a ”yes” decision on including China A-shares in the MSCI Emerging Markets Index, which tracks $1.6 trillion1 worth of assets around the world, and related indexes.2 The decision is seminal because it provides previously unavailable A-share exposure in emerging markets (EMs) and global indexes.

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Market review: The Fed takes on the elephant in the room


June 21, 2017
Subject | Institutional | Invesco | Macro views | Trimark

Last Wednesday, the Federal Reserve (Fed) announced it would raise the fed funds rate by a quarter point – its fourth rate hike since starting to tighten in December 2015. This was very much expected and created no surprises for investors. But the far bigger news coming out of the Federal Open Market Committee (FOMC) meeting is that the Fed released its plan to normalize its balance sheet. And with that, the Fed has finally addressed the elephant in the room.

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Full steam ahead: Fed hawkish, hikes rates

The U.S. Federal Open Market Committee (Fed) hiked its key interest rate by 0.25% today, to a target range of 1% – 1.25%. While the hike was fully expected by the market, recent inflation prints, such today’s May CPI falling by -0.1%, had left an expectation this would be a dovish hike. As it turns out, the Fed announcement was hawkish as it formally announced the details of their balance sheet normalization.

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Will U.K. election surprise lead to “softer” Brexit?

One year after the Brexit referendum and two years after the Scottish independence referendum, U.K. voters have surprised the country and the markets once again, with a dramatically different election outcome than suggested by almost every poll: Instead of an enlarged Conservative Party majority, which Prime Minister (PM) Theresa May wanted to see, the result of the June 8 general election is a “hung parliament” – no party controls a majority.

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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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Interest-rate outlook: Excess pessimism in U.K.

During the recent rate rally, the Canadian 10-year government bond yield held at 1.45% and has bounced slightly from there, but still remains at the lower end of its recent range.1 Economic data has tapered off from the strong rebound seen in the first quarter and the Bank of Canada continues to keep monetary policy on hold. The U.S.’s recently imposed tariffs on Canadian softwood exports raised concerns about broader trade implications. In addition, a Canadian subprime mortgage lender has experienced a liquidity drain, drawing attention to an area of the mortgage market that is not typically in the news. We would expect Canadian yields to remain supported in any sell-off.

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