theglobeandmail.com
RBC Fund Manager Kedwell: Canadian Stocks Offer More Value Than US Equities
RBC Dominion Securities portfolio manager Stu Kedwell and Doug Raymond, who co-run the $8.2 billion RBC North American Value Fund, find more value in Canadian equities, which comprise 60% of their fund, noting that all domestic sectors except technology are trading at or below their long-term averages.
- What is the core investment strategy of the RBC North American Value Fund, and what are its current top holdings?
- The fund focuses on buying growth stocks at reasonable prices, conducting scenario analyses to assess potential outcomes. Currently, its top holdings include Canadian banks (Royal Bank and TD Bank), energy companies (Canadian Natural Resources and Imperial Oil), pipelines (TC Energy and Enbridge), the iShares S&P/TSX Global Gold ETF, and several US tech giants (Meta, Alphabet, Microsoft, and Apple).
- What is the fund manager's outlook for Canadian and US equities, and what are the underlying reasons for this assessment?
- Kedwell believes Canadian equities offer more value currently, as all domestic sectors except technology trade at or below their long-term averages. Concerns exist regarding potential loan losses at Canadian banks due to rising unemployment and falling condo prices, but he notes they are well-capitalized. Conversely, the fund holds several US tech stocks, but these holdings were chosen based on specific attributes, not just overall market trends.
- How does the fund manager's outlook on gold and Berkshire Hathaway reflect the broader macroeconomic environment and his assessment of investment risk?
- Kedwell's bullish stance on gold stems from increasing central bank demand and concerns about the weakening US dollar and growing US fiscal deficit. His continued holding of Berkshire Hathaway, even with Warren Buffett's impending retirement, rests on confidence in Berkshire's established management and diversified revenue streams. This approach underscores a preference for established, resilient companies and diversified investments in a potentially volatile macroeconomic environment.
Cognitive Concepts
Bias by Omission
While the article provides a comprehensive overview of Kedwell's investment strategy, potential omissions could include: a discussion of the fund's performance during periods of market downturn; a more detailed breakdown of the fund's holdings beyond the mentioned examples; and opposing viewpoints to Kedwell's gold and Berkshire Hathaway bullishness. However, given the article's length and focus on a specific interview, these omissions are understandable.
Sustainable Development Goals
The article focuses on the investment strategies of a fund manager, highlighting economic growth and job creation within the Canadian and US markets. The discussion of various sectors, including energy, technology, and finance, demonstrates an impact on economic growth and job creation. The fund's success in outpacing market indexes also indicates positive contributions to economic growth.