Portfolio manager David Tulk discusses how the results of the U.S. election could affect global markets and portfolio positioning. In the context of positioning, David notes that Canada and emerging markets have some similarities – both are higher-beta regions, for instance – but emerging markets arguably offer more “bang for your buck,” and are better growth environments. An anticipated lower U.S. dollar could also make emerging markets more favourable in a portfolio. David believes currency works as an asset class in the 60/40 portfolio. Given where yields are, there isn’t much coupon income. He notes that bonds can only rally so far with low interest rates, and the low-interest-rate environment is expected to stay for a while. Gold has a correlation to real interest rates, and real interest rates are likely to remain low. David thinks gold can serve as a good hedge against the inflation risk associated with currency.
Recorded on November 5, 2020.