Invesco Canada blog

Insights, commentary and investing expertise

Who’ll be watching the punch bowl in 2018?


December 19, 2017
Subject | Institutional | Invesco | Macro views | Trimark

Last week saw a confluence of central bank meetings and decisions over the course of two days. They revealed central banks that are in the process of – or on the verge of – tightening. I was reminded of former Federal Reserve (Fed) Chair William McChesney Martin, who said the central task of his job was “to take away the punch bowl just when the party gets going.” But is the party really just getting going – or is it getting long in the tooth? And, most importantly, who is the chaperone? And how strict are they?

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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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Three macro trends to be thankful for


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

This week marks Thanksgiving in America. This coming Thursday we will break bread and devour turkey with family and friends and, most importantly, take time to show gratitude for that which is good in our lives. The act of showing gratitude and giving thanks is a universal concept and one that I would like to indulge in this week’s commentary. In that spirit, I take stock of the past year and share with you three market and economic trends for which I am thankful:

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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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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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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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Working capital: The worst kind of expense


July 20, 2017
Subject | Active management | Institutional | Trimark

As active portfolio managers, we seek to identify and exploit inefficiencies in the marketplace. One major inefficiency, in my view, is the common fixation on earnings-based valuation metrics. Focusing on free cash flow, rather than net income, EBIT or EBITDA, allows us to find valuation arbitrage opportunities based on gaps in accounting earnings and free cash flow.

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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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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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Three ways we manage risk in emerging markets


June 5, 2017
Subject | Active management | Institutional | Trimark

Many investors perceive emerging markets (EM) as a risky place to invest their money. Visions of faraway places with different approaches to business, regulation and governance can be intimidating, but the reality in many EM countries is very different today than it was just twenty years ago. In this blog post, I’m going to discuss the three main ways our funds differ from others when it comes to managing risk and maintaining a strong risk/return profile for our EM investments.

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Softwood lumber saga: Why duties may not be as bad for investors as feared


May 23, 2017
Subject | Active management | Trimark

In a continuation of a long-running trade dispute that dates back to 1982, Canadian softwood lumber exports to the United States were recently hit with an average countervailing duty of 19.88%, with additional anti-dumping duties to be announced in June (expected to be at least another 5%).1 This follows a 10-year period under a Softwood Lumber Agreement that required much less onerous export taxes from Canadian producers.

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3 reasons for active management in EM

Now that passive index strategies are ubiquitous across markets, I am pleased to see that the overall active vs. passive debate is over, replaced by a more nuanced discussion about where each approach makes sense in an investor’s portfolio. I am of the firm belief that emerging markets is an investing space in which active management is not only preferred, but in most cases, vital. Here are my three main reasons why.

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