Over the past year, China has grappled with escalating challenges—from a real estate meltdown to tech crackdowns and slowing growth—leading many investors to deem the country "un-investable." However, recent policy moves from Beijing, including significant interest rate cuts and liquidity injections, may point to a major inflection point ahead.

In this episode, Rob Duncan speaks with Forstrong’s Research Analyst, Shibo Gu, on the ground in Northern China. Together, they unpack the latest stimulus measures and their potential impact on investors eyeing opportunities in the world’s second-largest economy. Is this renewed optimism justified, or should caution still prevail?

Chapters

00:00 Introduction to China's Economic Landscape
03:28 Stimulus Measures and Their Implications
08:42 Investment Opportunities in the Wake of Stimulus
12:04 Market Outlook and Investor Sentiment
18:09 On-the-Ground Insights from China

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Previous posts on visiting China.

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Global Thinking: Postcard from China, Part 2

Investors have been pouring into Canadian ETFs at an unprecedented rate in 2024. While cash and US equity ETFs have dominated flows this year, recent trends suggest a shift is underway. Weaker economic data and volatility in Japan have investors worried, while international markets present compelling opportunities.

In the latest Global Thinking episode, Rob sits down with Daniel Straus, Director of ETF Research at National Bank, to discuss recent ETF trends and investment flows. Together, they explore why investors should focus on global opportunities and how to navigate the period ahead.

Show Notes:

00:00 - Exploring ETF Flows and Market Trends

05:08 - The Growth of the ETF Market

08:25 - Fixed Income Flows and the Demand for Cash

12:41 - The Appeal of International and Emerging Market ETFs

15:47 - The Unwinding of the Carry Trade in Japan

19:59 - Interest Rate Policy and Rate Movements

22:55 - Canadian Equity ETF Inflows and Home Bias

23:25 - Investing in Canada's Energy Markets

25:16 - Canadian Banks: A Demand Spot

28:06 - The Growth of Active ETFs in Canada

30:25 - Covered Call ETFs: Present Income vs. Future Upside

37:46 - Exploring Consciousness and Free Will

When asked about the prognosis for markets, American financier J. P. Morgan once famously quipped, “they will fluctuate”.

That statement is not meant to be dismissive of recent market volatility: the first half of 2024 has faced a long list of new realities from an AI fervour to contentious global elections. But, today more than ever, wealth accumulation demands a focus on fundamentals and looking beyond recent hype. Currently, there are historic opportunities to pivot into new investment themes as markets find a new footing and fresh macroeconomic trends emerge.

In this discussion, Rob Duncan, Senior Vice President, Portfolio Manager & Lead ESG Officer, sits down with Forstrong Portfolio Manager, Terry Shaunessy, to explore where investors might be succumbing to market exuberance and identifying strategies to navigate volatility while achieving their financial objectives.

Disclosures: https://forstrong.com/disclosures/

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Everyone is talking about Nvidia. Just 2 years ago the stock was worth a mere $400 billion. Now, depending on the time of day, it is worth somewhere around $3 trillion and was briefly the most valuable company in the world. Investors should not overcomplicate things here: Nvidia and the broader AI theme are in the midst of a speculative mania.

Of course, we have been here before. Investment stories, much like the current one, can be intoxicating and lure every last investor into the trade. During such times, diversification seems unnecessary. Who wants it when “one and done” portfolio decisions look so easy? Yet, investors invariably paying heavily for having taken on concentrated risk exposures. The late 1990s are a prime example.

At times like this, it is always useful to revisit the role of the portfolio manager: why do clients pay us to manage their wealth? It is not for flawless clairvoyance. Rather, we are paid to anticipate probable risks, prepare for opportunities and, importantly, not lose our proverbial minds when everyone else has lost theirs.

In the latest podcast, Rob Duncan, Senior Vice President, Portfolio Manager & Lead ESG Officer, sits down with Tyler Mordy, CEO & CIO of Forstrong, to discuss the recent volatility in Nvidia and implications for the broader market.

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Canadian ETF inflows continued at a brisk pace in May, bringing the year-to-date number to more than $24 billion (handily beating their mutual fund counterparts). Total assets now stand at more than $432 billion with 1407 ETFs to choose from. With all this selection, how do investors know which ETF to buy?

To help answer these questions Rob Duncan, Senior Vice President, Portfolio Manager & Lead ESG Officer at Forstrong, sits down with Patrick McEntyre, Managing Director and Co-Head of Institutional Sales of ETFs at National Bank Financial Group, to discuss:

• Key trends within the ETF industry
• Where investors are allocating funds
• How changes in ETF flows align with Forstrong’s investment outlook and positioning

In addition, Patrick walks through how National Bank provides liquidity on large trades, when ETFs can be more efficient than stocks and bonds, and why the rush to International and Emerging Market equities might be at a tipping point.

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Looking back on the month of April, it was a tough time for many investors. Broadly, many stock market sectors broke their winning streak. Bonds didn’t fare any better as continued strong global economic data pressured long-term yields higher.

As the macro regime continues to unfold, Forstrong’s investment team continues to believe the world is transitioning toward an inflationary boom. Increased volatility is a key tenet of this shifting economic landscape. But the theme of broadening performance (away from the handful of US mega-cap stocks which carried markets last year) is alive and well. In April, commodity-sensitive exposures and emerging markets equities staged impressive rallies.

In this episode, Rob sits down with Forstrong Lead PM, David Kletz, to unpack these latest development. They also dive into why an improving outlook in emerging markets could lead to outsized returns this year.

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US equities have taken center stage over the last few years and are touching all-time highs as consumers continue to show strength with healthy balance sheets and less sensitivity to higher interest rates. But is all this good news already priced in?

What may be surprising is that returns are no longer being powered primarily by the “Magnificent 7”. Instead, forgotten and unloved sectors are now witnessing a steady bid.

In this episode Rob sits with BMO’s Chief Investment Officer, Sadiq Adatia, to talk about their recent market outlook and why they believe a broadening market rally is in the cards for 2024. While high quality and financials in the US are in focus, gold and commodity-oriented equities could see a continuation of strength.

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Interest Rate Obsession: Are Markets Missing the Bigger Picture?

Markets have found a new obsession to dote upon: timing central bank rate cutes. Everywhere you look, interest rate expectations continue to dominate headlines and market narratives. Imminent recession fears have been replaced with questions on the timing and magnitude of interest rate cuts, but interest rates are only part of the story. The larger trend is the impressive resilience not only of the US economy but also in other parts of the world.

After pricing in up to 6 rate cuts to start the year investor expectations have quickly scaled back to 3. One could even wonder, are we actually in the “no landing” economy?

In this episode Rob sits down with Forstrong Lead PM, David Kletz, to talk about expectations on rate cuts and the possibility of a “Bull Steepening” on the yield curve. Additionally, they walk through Forstrong’s recent strategy changes and why they see greater opportunity in US mid-caps, Emerging Markets debt and Swedish equities.

For more information on our podcasts please visit: https://forstrong.com/podcast/

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