Portfolio manager David Tulk shares his Q3 outlook and provides an update on ongoing market fluctuations and uncertainty. David and the Global Asset Allocation (GAA) team believes diversification is the most important consideration in portfolio construction. David and the GAA team establish holdings that aim to provide a balance of returns and defence. This year, they were pleased with their 60/40 portfolio mix as bonds rallied during the COVID-19 peak and equities rebounded after stimulus was injected. Looking ahead, David thinks global trade may struggle in a post-pandemic world. The GAA team also has concerns that Canada may be adversely impacted, having come into this crisis with high levels of household debt. The slowdown in immigration could also mean a lower growth rate for Canada over the next ten years. To counter this uncertainty, the GAA team has been adding to gold exposure (an out-of-benchmark allocation), because they believe it will help hedge against near-term uncertainty.
Recorded on July 16, 2020.