Invesco Canada blog

Insights, commentary and investing expertise

Is this the start of a long-awaited up cycle in Asian markets?

Last November, the Invesco International and Global Growth team reported that in Asia ex-Japan, the building blocks were in place to shore up top-line growth. Our outlook for Earnings, Quality and Valuation (EQV) was cautiously positive. 2016 marked the first time in five years where consensus earnings forecasts did not collapse at year-end, and an upward bias to earnings forecasts has continued into 2017. Is this the beginning of a new earnings growth cycle?

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Improvement signals in international equity markets

The Invesco International and Global Growth team has been managing international equities for 25 years. In that time, we’ve seen the performance pendulum swing widely across global regions and investment styles. But no matter the market conditions, our focus on EQV – Earnings, Quality and Valuation – has remained constant.

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Europe: Are elections overshadowing opportunities?

Ask any investor in Europe what concerns them most, and election risk will likely be near the top of the list. With French elections underway,German elections looming, and the fallout from the U.K.’s Brexit vote ongoing, that concern is to be expected. However, the Invesco International and Global Growth team believes that election risk – while real – may be overstated. Looking through our EQV (Earnings, Quality and Valuation) lens, we believe that valuations in the highest-quality companies are expensive, but we have been opportunistic in finding new names that are seeing short-term dislocations.

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Interest-rate outlook: Impact of upcoming British election

The yield on the 10-year Canadian government bond broke through its recent range of 1.60%-1.87%, reaching a low of 1.43% on April 18.1 Geopolitical risks, as well as concerns about elections in France were the big driver as the economic data in Canada has been fairly positive.

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Currency outlook: Global growth, eurozone elections continue

Canadian dollar strength has faded recently despite stronger economic data. Weakness in oil prices has been responsible for some of the reversal. The Bank of Canada has, at least temporarily, dropped its dovish tilt, but appears content to leave the overnight rate target at 0.50% for the foreseeable future.1 The Canadian dollar continues to remain overvalued, in our view.

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Currency management: A simple roadmap

Global diversification has become standard practice among investors around the world. As the trend toward global investing grows, managing currency risk in global portfolios is likely to take on increasing importance. Sovereign wealth funds, central banks and other investors are likely to consider the benefits and challenges of currency hedging as their investment strategies become more globally focused. However, evaluating the impact of foreign exchange risk on portfolios and how to address that risk is a debated issue. Should global investors adopt strategies to specifically address currency risk or should they not?

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