July 24, 2021
As markets adjust and we transition from the early cycle to the mid-cycle, all eyes are on the central bank's next move. Director of Global Macro, Jurrien Timmer, is back on the program to discuss the Fed's next likely move and share the latest data, with the help of historical analogs. Jurrien believes we are transitioning from the liquidity-driven phase of the bull market, and the rotation now has reversed back into growth and bonds. The Fed has signalled that interest rates could be raised in 2023. Before raising interest rates, the Fed must taper asset prices. Jurrien shares that the Fed may not want to have the conversation of the interest rates and tapering at the Jackson Hole meeting in August, noting that they may not want to spark any inflationary fears. Jurrien also adds that although growth is favourable, value and small caps may return if inflation ends up sticky because they are better inflation hedges. Follow along with Jurrien's charts on Twitter: @TimmerFidelity
Recorded on July 19, 2021.
July 23, 2021
At the start of the pandemic, investors flocked to tech companies in huge numbers after recognizing the importance of innovation to business continuity. HyunHo Sohn, Portfolio Manager of Fidelity Technology Innovators Fund, dives into where tech is going as economies begin to reopen in the second half of 2021. HyunHo says both the fund and the tech sector overall work in both growth and value. The overall fund and the overall tech index reached a new high in the first quarter of this year during the rotation out of growth and into value. HyunHo notes technology innovators are somewhat Covid proof since tech companies have benefited from an increase in demand for goods and services. He also discusses interesting opportunities in technology noting that he is focusing on semiconductor businesses.
Recorded on July 16, 2021.
July 22, 2021
As economies reopen around the world, many investors are keeping an eye on rising inflation. Andrew Marchese, Chief Investment Officer and portfolio manager, shares his insights into the market's key themes as we progress into the second half of the year. For Canadian investors, Andrew manages Fidelity Canadian Disciplined Equity Fund, Fidelity Canadian Equity Private Pool, and Fidelity Concentrated Canadian Equity Private Pool. Andrew frames today’s discussion around three main themes investors should be aware of. The first theme he looks out for is speculation. We're dealing with an unprecedented amount of stimulus. Hence, as the cycle progresses and central banks reduce their stimulus, we'll have to keep an eye on how speculation in certain asset classes may decline. The second theme is inflation. Andrew shares many macroeconomic indicators that can continue to build inflation, noting that the amount of stimulus poses a headwind to inflation. For the third theme, he encourages investors to focus on the fundamentals of companies going forward. Additionally, Andrew shares his thoughts on housing and financials, and the sectors that might attract this stimulus and benefit from the expected environment.
Recorded on July 15, 2021.
July 21, 2021
In the 20th episode of the Fidelity ETF Exchange - powered by FidelityConnects, co-hosts Étienne Joncas Bouchard and Himesh Patel sit down to recap notable trends and headlines in the Canadian ETF Industry for the second quarter of 2021. With the first six months of the year behind us, the Canadian ETF industry has brought in a record $30B in net new assets (best first 6 months ever). Some of the key areas of focus for hosts Etienne & Himesh include the positive uptick in flows for Value and Dividend factor ETFs, the emergence of a new category in cryptocurrency ETFs as well as the sizeable gap between inflows to equity vs. fixed-income.
Recorded on July 14, 2021.
July 20, 2021
Extreme weather events throughout the world are prompting governments to increase the urgency around combating climate change. We welcome institutional portfolio manager Mike Hagopian and senior portfolio manager Anna Lester from Geode Capital Management to discuss global sustainable investing. Mike and Anna are part of the team behind Fidelity Sustainable World ETF and discuss their positioning in the fund for the second half of this year. Geode’s strategy is to use the MSCI ACWI Index to build a portfolio that seeks to satisfy three main things: having an ESG advantage relative to this index, delivering returns that outpace the index, and delivering a similar risk profile to the index. Mike says energy and real estate are some sectors where there is more emphasis on that “E” pillar. Anna says real estate is about 40% of the global energy use, so more green buildings would significantly improve global emissions.
Recorded on July 14, 2021.
July 19, 2021
In today’s episode, we are joined by Mike Hickey, institutional portfolio manager, to provide an update on Fidelity Insights Class. Mike works closely with Will Danoff, the renowned portfolio manager of Fidelity Insights Class in Canada, and Fidelity Contrafund in the United States. Mike shares that he and Will are growth investors looking for earnings and cash flow growth in the next three to five years. He believes stocks in tech and healthcare have high revenue growth, and they’re secular growers. COVID-19 has changed the behaviour of consumers, and Mike believes a resurgence should have little impact on Insights, while continuing to speed up digital adoption (e-payments, e-commerce) by consumers. Mike thinks that the landscape is looking increasingly more global. One of the benefits of Fidelity is that roughly 30% of analysts are outside the North American region. Therefore, they are looking at companies benefiting from the same trends in North America, primarily in the growth space. Mike also discusses ESG, noting that company executives are increasingly more focused on the “E” and “S”.
Recorded on July 13, 2021.
July 17, 2021
Institutional portfolio manager Abhijeet Singh speaks with host Pamela Ritchie about the opportunities in emerging markets (EM) and discusses the trends shaping Fidelity Emerging Markets Fund. Data security issues and what is being shared with other countries have led to a tug of war between China and the U.S.. Abhijeet says valuations have become less expensive as this has happened. Abhijeet also points out that the U.S. dollar is an important component of emerging market assets and he believes over the long term the amount of stimulus and money printing could make the U.S. dollar weaker. He also shares where Emerging Markets Fund is currently overweight and underweight, noting that the fund has been overweight in Brazil and Mexico since things became expensive in the second half of last year. Going forward, the fund may start to revisit China as things get more affordable in terms of valuation.
Recorded on July 15, 2021.
July 16, 2021
Jurrien Timmer, Director of Global Macro, is back on the program to discuss the narrative surrounding bubbles bursting and to walk us through the various indicators and variables he is paying attention to. Jurrien does not believe that we are experiencing a big market bubble, as bubbles have distinct characteristics. The Fed is succeeding in keeping interest rates low, as evidenced by the fact that the 10-year treasury yield is lower than normal. Jurrien would classify that if there is a bubble anywhere, it would be the bond market, where interest rates are repressed. Also, Jurrien discusses the impact of low-interest rates on GDP and whether it would lead to a generational debt crisis. He says the old saying is that everyone can be solvent if interest rates are low enough, noting that if rates are low, debts can be paid off. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity.
Recorded on July 12, 2021.
July 14, 2021
Matt Siddle, UK-based portfolio manager of Fidelity Europe Fund, discusses the implications of Europe's economic reopening and the diversification opportunities that exposure to Europe can provide to investors' portfolios. Europe has been more restrictive than the U.S. and Canada. Matt notes that the lockdowns have had a differential impact on the goods-producing part of the economy and the service parts of the economy causing a big divergence. He says he is interested in key names such as airlines and cruise ships; however, fashion retailers have lagged in the reopening rally. He also notes he is cautious of European banks broadly because of interest rates. Matt says a combination of good businesses with valuations that are more attractive is the core to the portfolio. Additionally, Matt shares his thoughts on the inflation debate and the extent to which ESG provides an alpha advantage.
Recorded on July 9, 2021
July 13, 2021
Kelly Lannan, Fidelity's Vice President of Young Investors, takes us through some of the latest trends and the habits and priorities of younger generations. Kelly believes the recent events of 2020 and 2021 have motivated young people to learn more about trading and investing, but Kelly believes younger investors are often prioritizing the shorter term over the long term when it comes to financial goals. Kelly also notes that a shift in technology has led to the rise of fractional shares trading, which is important because younger generations have told Fidelity via a recent U.S. study, that starting small is their preference. ESG is important to young investors as they want to work with companies that align with their values. However, this does not mean the end return is any less important to young investors. Additionally, Kelly believes that improving financial literacy among young people would lead to opportunities and makes firms more accessible and inclusive. She also shares that many people in younger generations are naturally risk-averse.
Recorded on July 8, 2021.
July 12, 2021
As economies worldwide are transitioning to a new normal, investors discuss other transitions that might also be underway. Portfolio manager Ramona Persaud shares how she is approaching her portfolios as we transition from early to mid-cycle, her thoughts on ESG investing, and the sectors in which she finds opportunities. Ramona runs Fidelity U.S. Dividend Fund and is the sub-portfolio manager on many popular mandates. She was also recently named one of the 20 top female portfolio managers in the United States by Citiwire USA. Ramona shares that during the mid-cycle phase, things usually slow down as we are no longer at a blistering recovery pace. She says that she is leaning towards defensives; however, there’s good valuation opportunity in cyclicals related to pandemic recovery outside of the U.S. Ramona advocates for ESG investing and believes that capital should play a role in improving the world over time and not damaging it.
Recorded on July 7, 2021.
July 10, 2021
Many investors have recently been bombarded with conflicting information from the news and social media. Denise Chisholm, sector strategist, is back on the program to provide clear information on what may be ahead in the overall markets. Denise and host Pamela Ritchie discuss the U.S. payroll report, and Denise notes the report shows us how different this cycle is relative to past economic recoveries. Denise also identifies that wages are hitting an all-time high, but the number of jobs available is not confirming this. Denise shares that as much as valuation is informative, it is not predictive of what the equity market is pricing in. One of the predictive indicators she prefers is the dislocations in the equity market relative to the dislocations in the credit market. Additionally, Denise shares her thoughts on the direction of the U.S. dollar, and she’ll provides some comments on the market noting that she’s seen a rotation into cyclically oriented sectors as well as a mini rotation from value to growth.
Recorded on July 7, 2021.
July 9, 2021
As we move into the second half of 2021, U.S. employers added 850,000 jobs, and average hourly earnings were up, but unemployment ticked up slightly from the previous month. Director of Global Macro, Jurrien Timmer, joins us today to help us understand this data and potential policy implications for the Fed. Jurrien speaks with host Pamela Ritchie about the state of the U.S. economy and says payroll and manufacturing numbers have been great recently. However, he believes the market has some indigestion as we transition from the valuation to the earnings phase. During this transition, things can get bumpy, and the Fed will continue the dance with the market on how much policy they can lift without upsetting financial conditions. Jurrien discusses the COVID-19 delta variant noting that it adds to the counter-rotation story as it has the potential to slow down the reopening. Jurrien believes it is a temporary rotation, but it comes down to the stickiness of inflation. Jurrien also shares his thoughts on the OPEC story, the potential for stagflation, and unpacks the global regulatory story. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity
Recorded on July 6, 2021.
July 8, 2021
Sarah Hoffman, Fidelity’s Vice President of AI and Machine Learning Research, explores the evolution of digital transformation and the implications of AI and machine learning trends for the wealth management industry. Prior to the pandemic, Artificial Intelligence and machine learning were massive topics for investors. So, as we reopen into versions of normalcy, Sarah discusses the state of AI as well as potential opportunities and challenges the industry may face. Sarah believes this pandemic highlighted a lot of socio-cultural awareness of biases for technology and AI. She says many companies and universities are trying to improve by becoming more aware of ethical considerations. Sarah notes that AI can be used to help investors choose investment strategies. However, it is important to be aware of the potential ethical issues that could come up. She also discusses using AI and technology to take away some parts of jobs humans don’t want for safety reasons. Additionally, Sarah shares her thoughts on the regulatory environment noting that it depends on the country as some are strongly regulated, while others have little regulation.
Recorded on June 29, 2021.
Transcript available (PDF): https://www.fidelity.ca/cs/Satellite/doc/transcript_podcast_hoffman_ai_machine_learning.pdf
July 7, 2021
Portfolio manager of Fidelity Global Real Estate Fund, Steve Buller, shares his perspectives on global commercial real estate and where he is finding opportunities as the global economy reopens. Steve shares that how inflation and interest rates actually affect global property stocks is more in perception than in reality. There is very little statistical correlation between global interest rates and the performance of global REITs. Steve notes that there are few specific geographical opportunities; however, there was a big bounce in the reopening trade sectors such as retail, hotels, and assisted living. Steve unpacks the future of office spaces and guesses that 80% of office space will be long-term and 20% will be flexible or coworking space. He believes that there will be a sizeable impact on the demand for office space over long periods of time because of remote working.
Recorded on June 25, 2021.
July 6, 2021
From the prospect of rising inflation to an uneven economic recovery, Ayesha Akbar, portfolio manager, shares her perspectives on global asset allocation in today’s market environment. Rising inflation and an uneven global economic recovery have exposed the disparities between wealthier countries and many emerging markets. Ayesha shares her insights on these topics and what she sees as the biggest risk for the markets six months into the year. Ayesha co-manages Fidelity Global Asset Allocation Fund. She believes that markets are worried that the Fed isn’t going to raise rates any time soon. Markets performed well during vaccine news, and since then, we have seen a consolidation phase. Communities that are lacking vaccinations are still suffering and lagging behind developed areas. She shares that economic restrictions have come back in many Asian countries with the lack of vaccinations, and consumer spending has slowed. Additionally, she discusses how she is currently positioned, noting that she has added a bit back to bond positions and is cautious of emerging markets. She also shares her thoughts on zero-interest bonds and discusses the possibility of growth stocks making a return.
Recorded on June 24, 2021.
July 5, 2021
As the Canadian economy begins to recover and reopen, Portfolio Manager and Director of Research Joe Overdevest shares his insights on key trends investors should be focused on with host Emily Anonuevo. Among other responsibilities, Joe co-manages Fidelity Global Natural Resources Fund alongside Darren Lekkerkerker. Joe centres this discussion on what he believes are the three main investment themes in the Canadian economy: earnings, commodities, and monetary and fiscal policy. The first theme is earnings. Joe notes that many stocks have moved up, but in the next year or so, we are going to determine where earnings didn’t go up as much as the market thought. Secondly, he believes as the Canadian economy opens, there’ll be more demand for commodities, which is positive for the Canadian market. Thirdly, there’s been a considerable amount of fiscal and monetary policy injected into the system; however, these policies are being lessened or taken away. Additionally, Joe shares what his role entails as Director of Research, which includes managing a team of research analysts. Joe also comments on the value of advice, and how ignoring the noise and headlines while staying focused on the long-term can be a wise approach.
Recorded on June 29, 2021.
Transcript available (PDF): https://mcdn.podbean.com/mf/web/9bquci/Overdevest_June29_Transcript.pdf
July 2, 2021
Jurrien Timmer, Director of Global Macro, shares his latest research across a range of different topics with host Pamela Ritchie. Jurrien says the COVID-19 resurgence discussion affects the market as bond yields are down from the highs and stocks going back to favouring the stable growers. He hopes that the vaccine will be able to mitigate some of the effects. Also, the housing market impacted financials as it leads to a wealth effect. Jurrien notes that on one side, those who have been unemployed and are collecting cheques, and on the other side, you have people who have remained employed and haven’t been able to spend money. Jurrien also discusses whether now is the time to go back to technology or stick with dividend-paying stocks. He shares that tech companies have strong cash flow; they don’t pay dividends typically, but they do buybacks. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity
Recorded on June 28, 2021.
July 1, 2021
Financials have stayed in great shape throughout the pandemic. Portfolio manager of the Fidelity Global Financial Services Fund, Sotiris Boutsis, speaks with host Pamela Ritchie about why investors might want to consider financial services in their portfolios. The Federal Reserve’s policy has shifted to an outcome-oriented policy which has affected financials positively. He notes that real rates are negative right now versus very positive over the last ten years. Sotiris also shares his thoughts on the Fed’s inflation target. He says there is a need to be monitoring inflation expectations stating that if the 5-year rate is falling more and more, the Fed could react with additional action. Additionally, Sotiris discusses his fund positioning. He is playing to secular themes, such as retirement and payments, and on the cyclical side, he is moving to good quality companies with decent growth.
Recorded on June 23, 2021.
June 30, 2021
More economies around the world are beginning to reopen, and consumers and corporations are not necessarily returning to their normal ways prior to the pandemic. Portfolio manager Patrice Quirion joins us to discuss his insights into potential new investment opportunities and risks that investors should watch for as this "new normal" begins. Patrice, who manages the Fidelity Global Concentrated Equity Fund and Fidelity International Concentrated Equity Fund, says he looks for good-quality companies trading at a compelling price. He notes that global small-mid cap companies represent a big part of the job and believe they add value. Additionally, Patrice adds that he tends to avoid hyped-up stocks because once a trend is established, odds are the stocks are overvalued.
Recorded on June 22, 2021