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  • Private Wealth Canada News
    extended family members Nearly half 46 per cent of wealthy families surveyed experienced a change or disruption in the family dynamic following a divorce loss of a spouse or partner and subsequent remarriage and blending of families In addition women are playing an active role in wealth planning and decision making as they make significant contributions to family wealth More than half 52 per cent of women came into their marriage or relationship with financial assets equal to or greater than their spouse or partner and one third 33 per cent of women are now the primary income earner or contribute equally to household wealth Families today come in all shapes and sizes and the wealthy are not immune to the ripple effect of extenuating circumstances on overall family financial well being says Keith Banks president of U S Trust While these circumstances are not unique to the wealthy they can complicate an already complex wealth planning process Traditional approaches to wealth management need to evolve and incorporate the diverse perspectives roles and contemporary needs of the modern family Canadian CFOs Are Optimistic Canadian CFOs report financial strength and spending are on the rise says the seventh annual American Express CFO Research Global Business Spending Monitor Almost half 48 per cent of Canadian CFOs surveyed reported very good financial performance over the past year and 76 per cent expect to see expansion over the next 12 months a 14 per cent rise from last year and a 53 per cent increase from 2009 This confidence also appears to translate into spending as 73 per cent of CFOs in Canada forecast moderate to aggressive spending and investment in the coming year Meanwhile for the first time in years it seems European economies are ready to leave the global recession behind and see opportunities for growth and expansion European confidence this year surged with 68 per cent of senior finance executives predicting economic expansion This is an increase from last year s 48 per cent which was the lowest percentage of respondents predicting expansion since 2009 the highest point of the recession HNWIs Reach Record High Improving economic and equity market performance helped add 1 76 million people to the global High Net Worth Individual HNWI population in 2013 while the investable wealth of HNWIs grew by nearly 14 per cent to reach a record high of US 52 62 trillion says the World Wealth Report 2014 WWR by Capgemini and RBC Wealth Management The report says that the 15 per cent increase in HNWI population in 2013 is the second largest since 2000 surpassed only by immediate post crisis catch up growth of 17 per cent in 2009 North America and Asia Pacific remained in a close race for the world s largest HNWI market by population in 2013 with growth in Asia Pacific narrowing North America s lead to less than 10 000 individuals North America s HNWI population expanded by 16 per cent to 4 33 million while Asia Pacific s grew by 17 per cent to reach 4 32 million North America remains the wealthiest region increasing its HNWI wealth by 17 per cent to reach US 14 88 trillion In Canada the total number increased by 7 2 per cent to reach 320 000 and their wealth by 9 1 per cent to reach US 979 billion Luxury Retail Has Better Growth Outlook Although the luxury segment only accounts for about four per cent of the total Canadian retail market it has a better growth outlook than regular retail says Susan Williams senior director strategic insights at the Cadillac Fairview Corporation Limited Speaking at the High End Retailing What Are The Limits session at the Canadian Retail Research Seminar she says the luxury market is emerging due to growth in household incomes a larger percentage of younger Canadians with discretionary income tourism and an influx of high end retailers that are anchored into shopping centres to attract luxury shoppers She says there is a whole new dynamic of shopping at malls today These anchor stores will provide a draw of all types of customers from new to cross shoppers Strategic category placement at different entrances will have an either further effect Independent Firms Need Succession Plans With 99 per cent of independent financial services and advisory practices going out of business when their founder retires firms must increasingly view succession planning as a growth strategy not a retirement strategy say SEI and FP Transitions The organizations released a white paper called Acquisition and Succession Shift Your Focus from Retirement to Growth saying that while nearly one third 32 per cent of advisors claim to have a succession plan only 17 per cent have a binding and actionable agreement This data points to the need for advisors to re assess their succession planning goals and strategies and how they relate to the long term vision of the organization By taking the time to plan for the future advisors are giving themselves a key competitive advantage in the present says John Anderson head of SEI practice management solutions SEI Advisor Network The process gives them a clearer picture of their firms overall health prioritizes finding a new generation of talent and sends the message to clients that the firm will be viable for years to come Action Traps Goalies Managers According to one study goalkeepers in games such as those now taking place in the World Cup choose to dive nearly 94 per cent of the time to stop penalty shots However standing and defending the middle of the net may result in better outcomes Investment managers often fall into the same trap of action bias says Mariana Araujo a Sao Paulo Brazil based equity research analyst for MFS Investment Management in the article Common Biases Of Goalkeepers And Portfolio Managers at the Private Wealth Canada website http www privatewealthcanada ca Fiera Quantum Introduces Fund Fiera Quantum Limited Partnership a subsidiary of Fiera Capital Corporation has launched the Fiera Quantum Income Opportunities Fund The fund is available to individual investors and aims to provide returns similar to those associated with traditional high yield strategies but with less volatility It will invest in a diversified portfolio of income generating securities throughout a company s capital structure while having the flexibility to hedge credit and interest rate risk June 23 2014 Digital Now Pressing Mandate Digital has become the pressing mandate for meeting client expectations reducing flight risks and increasing profitability in the wealth management industry says the World Wealth Report 2014 by Capgemini and RBC Wealth Management The report s Global HNW Insights Survey found that nearly two thirds of the world s high net worth individuals HNWIs expect to manage most or all of their wealth relationship digitally in five years and would consider leaving their current firm if an integrated channel experience is not provided HNWIs across all geographies are demanding digital capabilities from firms led by those in emerging markets Eighty two per cent of HNWIs in Asia Pacific excluding Japan 74 per cent of those in Middle East and Africa and 70 per cent of those in Latin America expect that the majority or all of their wealth management relationships will be run digitally in five years North American HNWIs have the lowest demand with just over half 58 percent expecting a primarily digital wealth management relationship in five years The Rich Are Richer A new study shows the top 13 per cent of after tax income in Canada goes to the top one per cent of income earners with an additional 100 000 added to their income each year through private corporations they control Piercing the Veil a tax study by Michael Wolfson of the University of Ottawa and Mike Veall of McMaster University and Neil Brooks of York University points to the role of tax planning in lowering tax bills for the wealthy It says the ultra rich the top 0 01 per cent earned 2 7 million to 3 5 million each through such corporations money that would not ordinarily be measured when Canadian researchers look at income inequality The study shows the wealthiest one per cent earn 10 times more than average Canadian and the rich got 14 6 per cent richer in 2013 Studies based on income tax figures alone point to the top one per cent earning 10 per cent of Canadian after tax income but the authors of the study say it is considerably higher 13 per cent and has grown rapidly in the past five years They conclude that income equality is higher than conventionally measured Technology Hurts Quality The race to fill vehicles with the latest technology is hurting quality says a report from J D Power Buyers reported more problems in their new cars and trucks this year than last year the second straight increase since 2012 when the average number of problems in new cars and trucks hit an all time low Porsche Jaguar Lexus Hyundai and Toyota were the best performing brands in this year s survey with Porsche coming out on top The worst performers were Fiat Jeep Mitsubishi Scion and Mazda Car buyers are frustrated with Bluetooth systems that won t connect to their phones voice recognition systems that don t understand them and navigation systems that aren t getting them where they need to go Dynamic Savings Overcomes Uncertainty Dynamic Savings Rates can help individuals save for retirement despite uncertainties about the future says Marlena Lee a vice president at Dimensional She said many retirement calculators ask individuals to put in values that are uncertain These include investment returns inflation and annual raises during a career However few people know how much they will be making at retirement or even 10 years before retirement Instead she said retirement saving should be based on income and escalate as income increases Then once a retirement goal is determined the savings rate can be adjusted to reflect outperformance by investment savings or periods where nothing is saved She also suggested that if people start saving early it fosters a habit of saving even when income is low Increases in saving can come as income rises and an ideal time is to use raises to increase the savings rate Part of the process involves guidepost the individual can use to make sure their savings are on track to reach their retirement goal Job Stability At Record High Job stability in Canada which was projected to be a thing of the past is stronger than it ever has been with those holding a job with the same employer for five years or longer sitting at a record high says a report from CIBC World Markets It found that there is a near record high 60 per cent chance that Canadians with stay with an employer after completing their first year on the job with the retention rate hitting nearly 95 per cent for those having five or more years at a company This stable and boring job market is the complete opposite of what was envisioned not too long ago says Benjamin Tal CIBC deputy chief economist who co authored the report The job market of the new economy was supposed to permanently alter employer employee relationships and workers were seen as becoming increasingly disposable with the implication that job stability would tumble But he finds that the opposite is happening driven by the changing needs of employers in the country that has seen vacancy rates rise without a corresponding decrease in unemployment ESG Index Launched S P Dow Jones Indices and Toronto Stock Exchange have launched an ESG index The S P TSX 60 ESG environment social and governance index is designed to track the performance of the constituent companies of the S P TSX 60 while taking into account each company s sustainability performance relative to the corresponding industry specific standards RobecoSAM an investment specialist focused exclusively on sustainability investing will evaluate company sustainability profiles using its proprietary assessment methodology It lets market participants who currently use the S P TSX 60 to deepen the scope of their stock analysis to include sustainability criteria June 16 2014 Make Sure Estate Plan Is Clear An estimated 1 trillion or more is positioned to change hands in Canada over the coming years as baby boomers age and assets begin to transfer to younger generations The country s high net worth population alone held close to 900 billion in investable assets in 2013 says RBC Wealth Management and with improving economic conditions that figure is likely to grow This impending transfer of wealth is putting the onus on baby boomers to ensure that their estate plans are crystal clear RBC Wealth Management says a comprehensive estate plan needs to consider not only the children but the surviving spouse Communication is vital the organization says and it recommends people have open and regular discussions about their intentions goals and plans Surge In Private Wealth There are millions more millionaires in the world thanks to a huge surge in private wealth globally says the Boston Consulting Group More than 16 million households passed the mark in U S dollars in 2013 up from 13 7 million in 2012 The U S has the highest number of new millionaires Gender Diversity Key Issue In recent years the Canadian business community s desire for a range of perspectives on boards of directors and in the executive ranks has made board and management diversity a key corporate governance issue for Canadian companies and policymakers says Mercer As demonstrated in part by a recent Ontario Securities Commission OSC initiative on gender diversity on boards and in executive officer positions companies are facing mounting pressure to show real progress in increasing diversity and ensuring that it is sustainable Mercer says Canadian companies already disclose the number and percentage of women on boards of directors However the proposal to require disclosure of the number and percentage of women in executive officer positions including subsidiaries is new It would likely facilitate accountability on gender diversity and may shed light on the effectiveness of a company s gender diversity policy Ethical Culture Fights Corruption One in five 20 per cent of Canadian executives believe bribery or corrupt practices happen widely in business says the Global Fraud Survey by EY That s disturbingly high says Mike Savage a partner and Canadian fraud investigation and dispute services leader Corruption interferes with fair competition for business To overcome that companies really need to create a culture where ethical behaviour is at the core of their operations not just at home in Canada but also at their overseas operations They also need to encourage people to speak up if they think something isn t right The survey finds that while 74 per cent of Canadian organizations have whistleblowing hotlines in place that number is still much lower than countries like the U S 96 per cent and the UK 82 per cent Income Splitting Terrible Idea Two out of three families targeted by a Conservative income splitting plan would receive less than 500 while fewer than four per cent of such families some of the wealthiest in Canada would be eligible for a benefit in excess of 5 000 says a study by the Broadbent Institute This study spells out clearly why the Conservatives income splitting scheme is a terrible idea says Rick Smith executive director It would increase inequality and is skewed heavily toward a Mad Men style family with a high income earner and a stay at home spouse In addition to the scheme s unequal distribution of benefits across families with partners in different income brackets the benefits would also vary significantly by province Nine out of 10 Canadian households would receive no benefit at all Integrated Closes Fund Integrated Asset Management Corp and its real estate asset management arm have closed GPM 13 the 13th fund in its series of pooled real estate funds GPM 13 is a discretionary fund focusing primarily on industrial properties along with select retail and office opportunities in the Greater Toronto ON Area Ottawa ON Edmonton and Calgary AB Vancouver BC Montreal QC and Halifax NS markets It is structured as an open end fund recognizing market demand and respecting the desire of repeat investors to be able to periodically make additional investments while providing liquidity for rebalancing purposes New Approach Taken To IPPs The Registered Plans Directorate RPD of the Canada Revenue Agency CRA is taking a new approach to the review of earnings and service in individual pension plans IPPs says an Aon Hewitt Radar The goals of the new approach are to speed up the process of resolving problems to improve efficiencies and to provide greater certainty to plan administrators and members of IPPs Upon written request the RPD will validate the amount and type of earnings that the actuary is proposing to use for each plan member against the information previously reported to the CRA In addition the RPD will also confirm whether or not service with a particular employer qualifies as pensionable service The RPD will be bound by the validation unless an auditor discovers after auditing the IPP that the information previously provided to the CRA was incorrect ETF Performance Hits Record High ETFs and ETPs listed in Canada gathered US 1 25 billion in net new assets in May which when combined with a small positive market performance in the month pushed assets in the Canadian listed ETF ETP industry to a new record high of US 63 billion says preliminary data from ETFGI s May 2014 Global ETF and ETP industry insights report At the end of May the Canadian ETF industry had 300 ETFs with 415 listings from nine providers listed on one exchange Year to date BMO has gathered the largest net ETF ETP inflows with US 1 4 billion followed by Vanguard with US 620 million in net inflows First Asset

    Original URL path: http://www.privatewealthcanada.ca/private_wealth_news.php?date=2014-07-07 (2016-04-27)
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  • Private Wealth Canada News
    costs so more organizations are altering their business models to strengthen these managerial relationships Five Decisions Impact Investors Legg Mason surveyed affluent investors and identified the top five decisions they made that have had a positive impact on their investment success The top five decisions were changing their spending habits so they could save invest more developing a financial plan working with or increasing the role of a financial adviser investing in products other than just stocks and bonds and taking a more global approach to investing A significant majority 70 per cent of the investors surveyed believe the investment environment that future generations face will be more difficult than the environment investors face now They say the next generation must start investing early in life make sure they understand what they invest in avoid short term decisions based on emotions make a plan and stand by it over time and employ a professional adviser CI Launches Retirement Solution CI Investments Inc has launched G5 20i a retirement solution for investors who require immediate guaranteed cash flow The new mutual fund complements the G5 20 fund which provides guaranteed cash flow after a five year accumulation phase Both funds are part of G5 20 Series and each provides 20 years of guaranteed cash flow growth potential and protection from market downturns The funds will provide cash flow that can increase but never decrease through a feature that automatically locks in a portion of fund gains The G5 20 Series funds are actively managed diversified portfolios of income and growth investments Protection against downturns is provided through advanced risk management strategies Each fund distributes an annual cash flow equal to five per cent of the investor s initial investment or the Guaranteed Asset Value whichever is greater The cash flow is guaranteed by Bank of Montreal Private Equity Makes Contribution European private equity can make an important and valuable contribution to a portfolio says Christophe de Dardel director of private assets at Unigestion However he told the European Private Equity Markets session at its media event there are fundamental questions that must be answered before deciding where to invest Generally he said it is better to look south than to look north Northern markets such as Sweden while mature and solid are saturated overcrowded and full priced Opportunity however can be found in Spain he said which is re emerging fast While it is currently deserted that won t last much longer and the economy is on the recovery path Germany is another situation There is a myth that it offers an inexhaustible source of quality businesses ready to be acquired The reality is however there is low financial pressure on companies and company owners do not embrace private equity ownership making it the solution of last resort Retirement Shock Already Here The baby boom retirement shock is already here says a Royal Bank report on trends in Canada s labour force It says the steady decline in the participation rate

    Original URL path: http://www.privatewealthcanada.ca/private_wealth_news.php?date=2014-06-07 (2016-04-27)
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  • Private Wealth Canada News
    among investors between the desire for portfolio growth to meet their income needs and the willingness to employ solutions that will get them there The overriding emotions driving this misalignment are cautiousness and volatility fears says a Mackenzie Investments poll It found 52 per cent cite market volatility as an impediment to attaining investment goals As well over 50 per cent are investing more conservatively 39 per cent or no longer wanting to invest at all 12 per cent To help investors get back on track Mackenzie is launching five new funds and is seeking investor approval to change another fund s objectives The new funds and the repurposed fund directly address the need for either volatility management or income generation amidst changing market conditions Reported Returns May Not Be Returns Be a little wary of reported returns for illiquid assets says Andrew Ang Ann F Kaplan professor of business at the Columbia Business School Speaking at the CFA Society Toronto 2014 Pension Conference he said this is because there are problems with measuring the returns of illiquid assets such as private equity and real estate The reported returns are not returns he said due to biases in how these returns are reported In some cases infrequent sampling of returns can make the returns look more attractive with low risk Measured more frequently the returns and risks can be much different In real estate sample selection is sometimes used but this sees properties only valuated when the markets are high as the property is not likely to be sold when prices are down Instead investors need to work with cash flows and what is actually accruing to investors he said European Equity Outperformance Continued European equities the top performer in 2012 continued to outperform in 2013 says research by Baring Asset Management However North American equities reached the top spot driven by continued economic growth in the U S with good employment data stronger retail sales a recovery in house prices and improvement in consumer confidence The research also reflects the improving environment in Europe However it is clear that volatility remains in a number of major asset classes with many of the best and worst performing assets changing dramatically from one year to the next The study provides one explanation why multi asset investing with an unrestricted mandate to dynamically move into and out of asset classes has found favour with investors looking to achieve their targeted returns with less volatility than investing in equities alone Six Per Cent World Looms A world with a six to eight per cent return in equity markets is looming says Bill Priest chief executive officer co chief investment officer and portfolio manager at Epoch Investment Partners In the session Focus on Fundamentals Equities in a Slow growth Environment at TD Asset Management s Sharing of Knowledge Learning Series 2014 he said that currently it is a tale of two economies For the financial economy it is the best of times while for the real economy it is the worst of times as the quantitative easing that has fuelled equity market performance has not done a lot for the real economy He expects operations margins and productivity gains to continue because of globalization and technology Globalization means production can be moved to where it is most beneficial while the growth of technology is changing the way people do work However we are living in a world where growth is slow due in part to the threat of deflation and low interest rates which he doubts will rise very high Advisors Predict Negative Returns Canadian investment advisors are predicting negative stock returns for Canadian stock markets and 11 other asset classes for the second quarter of this year a dramatic departure from the positive outlook they shared in the first quarter of 2014 The change in sentiment was reported in the second quarter edition of Horizons ETFs Management Canada Inc s 2014 Advisor Sentiment Survey The survey asked Canadian advisors to share their outlook on 15 distinct asset classes and express their sentiment bullish bearish or neutral on the anticipated returns for these asset classes in the second quarter Collectively advisors were over 50 per cent bullish on only three of the 15 asset classes surveyed Less than half 47 per cent of the Canadian advisors surveyed expect Canadian stocks to deliver a positive return over the next quarter This is a stark turnaround in sentiment compared to the onset of 2014 in which 74 per cent of advisors stated they were bullish on the S P TSX 60 Index s performance for the first quarter CFIB Wants Broader Use The Canadian Federation of Independent Business CFIB supports the federal government consultations on more sustainable pension plans for federally regulated industries and crown corporations However it is disappointed that the target benefit plans which share risk between employers and employees would not apply to the core public service where this kind of plan is badly needed to address massive unfunded pension liabilities With the private sector moving quickly away from traditional defined benefit pension plans a shared risk model will be a terrific addition to Canada s pension landscape says Dan Kelly its president A shared risk plan could also help taxpayers get out from under massive unfunded pension liabilities such as the 6 5 billion liability at Canada Post alone We hope the federal government doesn t stop with Crown corporations and considers moving the core civil service to a less costly shared risk pension plan Canada Has Richest Middle Class In The World For the first time in history the Canadian middle class is the richest in the developed world says a New York Times study After tax middle class incomes in Canada substantially behind in 2000 are now higher even than the middle class in the U S This shows that middle class incomes have increased faster in Canada than anywhere else Canada s poor also seem to be better off

    Original URL path: http://www.privatewealthcanada.ca/private_wealth_news.php?date=2014-05-08 (2016-04-27)
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  • Private Wealth Canada News
    on domestic real estate pension funds could be seriously overexposed in the event of a downdraft in the market At the same time we are expecting attractive returns over the intermediate term in some markets in Europe and Asia so this is an excellent time to think about diversification and look at opportunities in those markets Canadian commercial real estate has delivered a 10 year annualized total return of 11 9 per cent says the Investment Property Databank That s the highest of all developed markets covered by IPD and second only to South Africa in that time period William Hughes global head of the UBS real estate group says near term performance will be more impacted by perception and pricing than fundamental changes the timing of which is very difficult to predict Canadian commercial real estate has enjoyed the status of safe haven attracting new investment capital and driving down yield If capital becomes less risk averse and seeks higher yield commercial real estate values may be affected he says Fiera Launches Private Infrastructure Fund Fiera Capital Corporation has launched a private infrastructure fund which provides Canadian accredited investors with access to investments in core infrastructure assets previously only available to institutional and private wealth investors The company feels that a wider group of investors from the retail channel should have access to and invest in infrastructure projects backed by creditworthy counterparties opportunities which are typically limited to institutional investors In addition to providing accredited investors with increased portfolio diversification the fund seeks to offer attractive long term returns generated from cash yield and capital appreciation The fund will aim to generate stable and predictable cash flows providing high single digit return per annum over five year moving periods says François Bourdon chief investment solutions officer at Fiera March 24 2014 Companies Should Leverage Retirement Strategies More than one fifth of the Canadian workforce has passed or is nearing retirement age says Statistics Canada yet research suggests many executives aren t too concerned with losing baby boomer employees to retirement in the next couple of years Only 26 per centof chief financial officers CFOs interviewed in a Robert Half survey said they were worried about this possibility while 64 per cent reported being unconcerned Among CFOs who are worried about losing baby boomers to retirement executives most commonly cited legacy knowledge functional skills and leadership as the greatest potential losses to their organization As a best practice all organizations should prepare their operations for the departure of experienced professionals be it to retirement or otherwise says Greg Scileppi president of Robert Half international staffing operations Properly developed succession plans can ensure that legacy knowledge functional skillsets and leadership will stay with the firm Scileppi adds that implementing programs that allow professionals to transition into retirement can be a win win situation for the employee and the employer Active Management Creates Returns What is happening with the money investors have invested in Canadian equities is the focus of an 18 Asset Management white paper The Return of Returns by Melanie Blue its head of Canadian equities It discusses the drivers of active management in the hope that by understanding how active managers outperform investors can have confidence in the active management opportunity It is at Return of Returns Capital Market Growth Fuels GDP Growing capital markets by one third could fuel a long term real growth rate in per capita GDP of around 20 per cent says research by two academics commissioned by AIMA The paper by Christoph Kaserer professor of finance chair of financial management and capital markets at the TUM School of Management in Munich and Marc Steffen Rapp professor of finance accounting and finance group school of business and economics at Philipps Universität Marburg in Germany says capital markets are significant drivers of economic growth and increasing their size could compensate for the post financial crisis decline in bank lending It finds that capital markets support economic growth by providing new sources of funding for long term investment and facilitating improvements in corporate governance It goes on to link activities by pension funds non bank lenders and active investors such as hedge funds to growth in the real economy Ukraine Crisis Impact Unlikely The tensions between Russia and Ukraine will not likely impact the global economy significantly says a report from Standish Mellon Asset Management Its March Global Macro Views report says while it could potentially increase volatility Ukraine s nominal gross domestic product of 175 billion is a small part of the 73 trillion global economy As well Europe is reluctant to escalate the conflict with Russia so the macro economic effect of the current conflict will likely be small Its forecast for global GDP growth for 2014 remains at 3 5 per cent with an increase to 3 7 per cent in 2015 Markets Proving Resilient Markets have proven reasonably resilient amid mounting geopolitical tensions in the Ukraine and weak U S economic statistics that were hampered by harsh winter weather says economists at Desjardins Group As a result they have boosted their forecast for the Canadian stock market citing the market s strength so far this year While the start to the year was painful for stock markets the firm notes that investors managed to get beyond the initial turbulence in emerging markets and have since performed well Since the beginning of February the S P 500 is up by more than seven per cent and the S P TSX index has gained 6 1 per cent And in the face of concerns about growth in emerging markets which could imperil stocks in the materials sector the Canadian stock market has made gains too Despite a difficult global environment for mining companies the sector has managed to hold onto the gains recorded since the end of 2013 it says March 17 2014 Jewelry Ranks As Investment Of Passion Europeans are more likely to invest in wine art and watches before fine jewels says the

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  • Private Wealth Canada News
    pan Canadian harmonization has remained elusive The authors recommend relaunching a national process aimed at achieving a pan Canadian system in which corporations need only register once to do business across the country February 24 2014 Affluent Consumers Curb Luxury Spending Affluent consumer confidence was up slightly in January says the Unity Marketing Consumption Index But affluent consumers show more inclination to save and invest in the next 12 months than they do to spend more on luxury high end products Only 22 per cent of the over 1 300 luxury consumers surveyed expect to spend more on luxury or high end goods and services in 2014 says Pam Danziger president of Unity Marketing At the start of 2011 28 per cent expected to spend more on luxury products in the coming year while at the start of 2012 26 per cent expected to spend more These number mean 2014 is shaping up to be challenging for companies and brands that target the affluent heavy lifting shoppers those who make up only 20 per cent of U S households but account for more than 40 per cent of total consumer spending says Danziger BMW Sales Growth Continues The BMW Group s sales growth of last year continued in January 2014 with deliveries increasing by 7 8 per cent In the first month of the year a total of 132 892 BMW MINI and Rolls Royce brand vehicles were delivered to customers compared to 123 302 the previous year This is a positive start building on last year s success says Ian Robertson member of the board of management of BMW AG sales and marketing The BMW 5 Series was a significant growth driver and the BMW 6 Series Gran Coupé saw high demand Sales of the MINI Clubman increased 18 9 per cent and the MINI Countryman continues to be in strong demand The new MINI model is expected to bring further momentum to sales as of spring Mutual Funds Reach 1 Trillion Canadians have accumulated savings of 1 trillion in mutual funds marking the first time in their 82 year history in Canada that funds have topped this significant milestone says the Investment Funds Institute of Canada IFIC Assets under management AUM for the mutual funds industry reached 1 01 trillion as of January 31 an increase of 140 1 billion or 16 1 per cent over the previous 12 months The importance of this milestone is the increase in wealth it represents for the roughly 4 6 million Canadian households that choose to save for their financial goals through mutual funds says Joanne De Laurentiis president and CEO of IFIC Mutual funds have grown tenfold in value since 1990 and are a cornerstone of Canadians retirement savings Large Cap Managers Post Strong Numbers Large cap managers in Canada posted their strongest benchmark relative performance in 12 years in 2013 says the Russell Investments Active Manager Report The median return for the year was 19 1 per cent more than six per cent ahead of the S P TSX Composite Index s return of 13 per cent Using annual returns 94 per cent of large cap managers beat the benchmark in 2013 compared to 76 per cent in 2012 This was the highest percentage since Russell began to closely track the data in 2000 The strong environment for large cap managers in Canada was not a surprise last year says Kathleen Wylie head of Canadian equity research at Russell Investments because active managers beat the benchmark in every quarter In fact they have outperformed the benchmark for five consecutive quarters which we have not experienced since 2001 Sub styles Play Significant Role While investors embrace concepts of growth and value as dominant influences of large capitalization equity management Ruo Tan president of Segal Rogerscasey Canada says sub styles also play a significant role in determining an investors outcome Using data for a 10 year period it found that not only do growth and value rotate over time but the sub styles also alternate In some cases these differences are quite stark The take away here says Tan is that investors should be keenly aware that simply owning growth or value in active portfolios only tells part of the story While sub styles tend to move with other similar styles some substantial differences occur along the way This certainly would seem to argue for having a program that is diversified across styles and sub styles and rebalancing regularly he says Canadians Stick To Canada Only 32 per cent of Canadians who hold stocks in their retirement portfolios plan to invest in markets outside of Canada says a poll from CIBC Asset Management The poll results also show that nearly half of investors surveyed 44 per cent say their main objective is long term growth which underscores the need to diversify their portfolios Key findings show 68 per cent of Canadians plan to invest mainly in Canada and 59 per cent of Canadians plan to invest primarily in GICs or other guaranteed investments savings accounts bonds or bond funds Just 35 per cent plan to invest mainly in stocks or equity funds and nearly half 48 per cent of Canadians between the ages of 18 and 34 plan to invest in global equities or mutual funds with that number declining sharply to 30 per cent for those between the ages of 35 and44 a demographic that is typically in their primary wealth building years ETF Assets Fall In January In January 2014 global ETF ETP assets fell by 3 2 per cent to 2 32 trillion based on negative market performance and net outflows of 7 6 billion say preliminary findings from ETFGI s January 2014 Global ETF and ETP industry insights report Concerns about economic uncertainty and unrest in emerging markets a fear that U S stocks are overbought and uncertainty over the impact of Fed tapering caused investors to take money from ETFs ETPs says Deborah Fuhr managing partner

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  • Private Wealth Canada News
    risk low Volatility is likely to remain high and could be exacerbated by fund flows She suggested investors should go global increase credit exposure adopt absolute return and shorten TIPS duration Global GDP To Pick Up Less fiscal drag in the U S a return to modest growth in Europe and a stabilizing Chinese growth rate all point to a notable pick up in global GDP in 2014 which should also give a small boost to Canada s outlook says Douglas Porter chief economist at BMO In the article Global Economic Outlook 2014 Brave Old World he says 2013 saw major equity markets thrive even as the global economy and many other financial markets muddled through another sub par year Those roles may reverse in 2014 as conditions appear to be falling neatly into place for a marked improvement in global growth in the year ahead with the U S in the lead U S GDP growth is expected to find a higher gear in 2014 accelerating from 1 9 per cent last year to 2 9 per cent European economic growth is also expected to improve After two years of recession the Eurozone has returned to growth and is putting the worst of its crisis into the rear view mirror For financial markets 2014 may prove to be more challenging with the Fed tapering bond yields expected to rise another 50 to 75 bps and stocks having skated through the past two years without a full blown correction Advisors Expect Torrid Pace To Continue Canadian investment advisors expect stocks to continue their torrid pace in the first quarter of 2014 but are bearish on every other asset class says the Q1 2014 Advisor Sentiment Survey by Horizons ETFs Management Canada Inc Collectively advisors were bullish on only six of the 15 asset classes surveyed all of which were equity indices Nearly three quarters of Canadian advisors 74 per cent are bullish on the S P TSX 60 Index which saw bullish sentiment increase from 68 per cent in the previous survey Canadian stocks generated a 6 94 per cent return last quarter The same bullish sentiment 74 per cent was observed on the S P 500 Index as well after an approximately 10 per cent return in the fourth quarter of 2013 Bullish sentiment on the NASDAQ 100 Index is at 75 per cent after a fourth quarter return 2013 return of 11 62 per cent Paper Looks At Commodity Prices Commodity prices exhibit longer bear phases compared to bull phases whereas the opposite is true for individual stocks says the 2014 Canadian Investment Research Award winning paper Bull and Bear Markets in Commodity Prices and Commodity Stocks Is There a Relation was submitted by Christos Ntantamis of the department of economics at Mount Allison University and Jun Zhou of the Rowe School of Business at Dalhousie University The motivation for the paper came after observing significant buzz in the mainstream media that questioned the performance of commodity stocks in view of increasing commodity prices say the authors They checked the academic literature to find results on how prices of commodities such as oil and gold affect stock prices of firms engaged in their production and found mixed results So instead of focusing on the direct relation between prices they investigated the relationship between the bull and bear markets of commodity prices and commodity stocks The paper also shows there is little evidence that the markets identified for the individual stocks are related to those for the commodity prices and commodity market phases tend to have longer durations compared to stock prices The award is sponsored by CFA Society Toronto and Hillsdale Investment Management Investors Must Remain Vigilant Returns from fixed income will come if investors remain vigilant in this low interest environment says Christine Horoyski senior vice president and portfolio manager fixed income Aurion Capital Management In the session Active Fixed Income Management Extracting Value in a Low Interest Rate Environment at the Strategy Institute s 11th Annual Foundation Endowment Not For Profit Investment Summit she said yields will not rise significantly this year so investors need to look for ways to add value and manage risk The outlook last year was to be careful This year she said they are cautious but the environment is starting to improve To add return investors need to seek value added opportunities and maintain control over the risks in their portfolio One solution is active fixed income management but active fixed income managers need to look different than the index She said this can be done by using active duration management getting paid for risk when credit risk is taken and looking for value added opportunities As well because Canada is so concentrated investors should look south of the border and across the pond where there is lots of opportunity January 27 2014 Growth Strategies Different For Canadian CEOs The PwC Global CEO Survey says that 85 per cent of the CEOs surveyed globally are confident in their revenue growth prospects over the next 12 months However there are some differences between Canadian CEOs and their global peers when it comes to growth strategies Forty per cent of Canadian CEOs see their main opportunity for growth coming through new joint ventures strategic alliances or mergers and acquisitions compared to just 20 per cent of CEOs globally To this end 58 per cent of Canadian CEOs entered into a new strategic alliance or joint venture over the past year and 67 per cent plan to do so within the next 12 months In both cases Canada sits well above the global average 34 per cent and 44 per cent respectively Seventy per cent of Canadian CEOs see the U S as the most critical country to their growth prospects over the next year well ahead of the UK China and Australia Global results show a very different picture with China the U S Germany and Brazil identified as the top countries What we re seeing is that CEOs worldwide have a glass half full approach to their growth prospects While strategies may differ we ve observed a consistent theme in our research that there is appetite to grow despite the higher costs associated with over regulation says Bill McFarland CEO of PwC Canada Opportunities Found Outside Canada Equity markets are in a good position to continue their winning ways through 2014 and by far the best place to reap these rewards is outside Canada says Sadiq S Adatia chief investment officer of Sun Life Global Investments In the article Look Outside Canada For Equity Opportunities at http www privatewealthcanada ca he says investors finally seem to believe in a healthy economy and have welcomed the U S Federal Reserve s plan to taper its economic stimulus program during the course of this year Acura MDX Up For Award The Acura MDX luxury performance SUV is one of three finalists for Canadian Utility Vehicle of the Year by the Automobile Journalists Association of Canada AJAC Already named AJAC s Best New SUV over 60 000 the model offers comfort and quietness dynamic performance fuel economy and advanced safety features The Acura MDX helped to create the luxury SUV segment and we re thrilled to see AJAC recognize its continued segment leadership by choosing it as a finalist for Canadian Utility Vehicle of the Year says Dave Gardner vice president of sales and marketing Honda Canada The award winners will be announced in February at the Canadian International Auto Show in Toronto ON Investors Unaware Of Rate Hike Impact Almost 60 per cent of Canadians with a retirement portfolio are unaware that rising interest rates can erode the value of some of their investments says a poll from CIBC Asset Management And those investors closest to retirement between the ages of 55 and 64 are particularly in the dark with 65 per cent unaware of the impact of rising rates Rising rates can negatively impact investors who own bonds or fixed income securities because when interest rates rise bond prices fall An extended period of falling interest rates and a flight to safety from equity market volatility has resulted in many Canadians investors loading up on bonds in recent years But most experts agree that this era of record low interest rates has reached an end Nobody knows exactly when and how fast interest rates will rise but Canadians need to understand the risk this poses to their retirement funds and plans says Steve Geist president of CIBC Asset Management Inc Canadians understand the impact that rising rates have on household expenses such as mortgages and loans But it s equally important for Canadians especially those approaching retirement and preparing to draw income from their portfolios to be aware of the impact that rising rates can have on their investments Sideways Market Has Year To Go There is at least one year for go before the current sideways market ends says Kim Shannon president and CIO at Sionna Investment Managers She told the What Market History Suggests Canada Well positioned in a Sideways Market session at the CPBI Pension Summit that this could be good news for Canada Markets have two speeds she said bull markets and sideways markets Sideways markets usually last 15 years and are a period when the excess is taken out of the markets When P Es drop to single digits they are usually followed by a bull market which is good for equities However when equities are in a sideways market commodities generally perform well Since the current sideways market may only have one to four years to run the prospects for commodities are good news for the Canadian economy she said Normalization Needed To Sustain Current Cycle Normalization of monetary policy is necessary to sustain the current cycle of economic growth says Joseph G Carson senior vice president and director of global economic research at AllianceBernstein Speaking at its Global Economic Outlook and the Changing Structure of Business Cycles over the Post War Period session he said with forecasts of five per cent growth in the U S it makes no sense for the central bank to keep the interest rate at zero In fact from a risk management standpoint increasing the interest rate would provide some measure of flexibility to fight future economic downturns As well a modest increase in interest rates won t kill the cycle it would make it more sustainable he said Overall he said economists are more optimistic entering the sixth year of economic expansion which started in 2009 However until recently leadership in the recovery was coming from emerging markets Now the U S and Japan are starting to show leadership Global Prospects Make Investors Optimistic Investors have started 2014 more optimistic about global growth prospects especially for the U S but increasingly for Europe as well says the BofA Merrill Lynch Fund Manager Survey for January The proportion of investors who believe the global economy will strengthen this year has risen to a net 75 per cent from a net 71 per cent in December continuing a trend of rising optimism that started in late 2012 This optimism is reflected in rising expectations for corporate profits with a net 48 per cent looking for an improvement up from a net 41 per cent in December Among the regions a net 29 per cent of investors choose both the U S and Japan with the most favourable prospects for profits Europe has improved to a net eight per cent expecting profit improvement from a net four per cent expecting deterioration in the December survey As investors growth convictions rise investors preference for global equities remains strong A net 55 per cent say they re overweight equities continuing a trend which started in mid 2012 when a net four per cent were underweight equities Pay Model Leads To Excess Some 72 per cent of institutional investors believe the U S executive pay model has led to excessive CEO compensation levels almost four times the 20 per cent of corporate directors holding such a view says a joint survey by Towers Watson and Alliance Advisors Only 34 per cent of responding institutional investors say the executive pay model at most companies is closely linked to company strategy compared to 70 per cent of responding directors Institutional investors and corporate directors also displayed sharp differences on the influence of say on pay voting on executive compensation Some 63 per cent of institutional investors believe say on pay votes have been a key driver of pay decisions by boards compared with only 26 per cent of responding directors However only 41 per cent of investors in contrast to 72 per cent of directors believe say on pay voting has affirmed the alignment of executive pay and company performance January 20 2014 High net Worth Need More In Retirement High net worth Canadians those with investible assets of 1 million or more require on average 2 3 million to be able to live out their ideal retirement lifestyle says a study by BMO Harris Private Banking This amount is two and half times more than the 908 000 average that Canadians as a whole irrespective of income level identified as the optimal amount required for retirement It found that the vast majority of high net worth Canadians are upbeat about saving for retirement with 95 per cent stating that they are confident about their ability to achieve their ideal retirement lifestyle versus 69 per cent of Canadians overall This optimism should not come as too much of a surprise given that the study also found that 86 per cent of high net worth Canadians say they are quite comfortable with their current savings and investment plan Further 70 per cent expect stocks to generate the most solid returns over the next five years well ahead of real estate 39 per cent bonds 24 per cent and cash 19 per cent Self managing Wealth Requires Consideration Making the decision to become a self directed investor is a question of whether managing your own wealth can make your life better and help you achieve your financial goals says Robert Stammers in Will Self directed Investing Simplify Your Life If you feel you have the required knowledge and experience to make complex financial decisions and plans for your wealth after you pass then you may be well placed to take the reins of your financial future he says However financial astuteness is only one part of the puzzle and Stammers offers up some points to consider before striking out on your own Read more Wealthy Hold Riches In Property Globally almost 200 000 ultra high net worth UHNW individuals hold a fifth of their wealth in property estimated at 5 328 billion says a report by Savills an international real estate advisor in association with Wealth X Europe s super rich hold the biggest share of all privately owned real estate assets followed by Asians Rich people in Europe hold 31 per cent of their wealth in real estate assets worth 2 391 billion followed by Asia 27 per cent at 1 800 billion and the Middle East 26 per cent at 880 billion Global real estate is mostly residential and held by occupiers but private owners are becoming more important in the world of traded investable property says Yolande Barnes head of Savills world research Porsche To Premiere 911 Targa The North American International Auto Show NAIAS in Detroit MI will see the world premiere of the Porsche 911 Targa This model is the first to combine the classic Targa concept with state of the art roof technology Just like the legendary original Targa model the new model features the characteristic wide bar in place of the B pillars a movable roof section above the front seats and a wraparound rear window with no C pillar But unlike the classic models the roof segment on the new Targa can be opened and closed at the push of a button When the button is actuated the fully automatic roof system stows the convertible top behind the rear seat system The combination of the wide rear end that is typical of all wheel drive models the Targa bar and the dome shaped rear window gives the latest 911 an extremely sporty appearance and a low slung profile It is powered by a 3 4 litre 350 hp 257 kW flat engine and is equipped with the Porsche Doppelkupplung PDK and Sport Chrono package It accelerates from zero to 100 km h in just 4 8 seconds and boasts a top speed of 282 km h Modest Growth Ahead For Canada Canada s top economists strategists and portfolio managers predict modest growth for both Canada and the United States with Canada lagging the U S in both economic activity and job creation over the next few years says the Annual Survey of Economic Expectations by Towers Watson Global growth is expected to improve but remain relatively subdued leading to continued low interest rates in most countries for at least another year In addition despite rising long term interest rates economic activity in Canada remains fragile and reliant on improvement in the United States and Europe and continuing strength in China In the near term survey respondents expect Canadian GDP growth to remain around two per cent rising to 2 4 per cent over the longer term Crestpoint Acquires Properties Crestpoint Real Estate Investments Ltd has acquired five properties in Toronto ON Vancouver BC and Montreal QC Together with other acquisitions completed in 2013 the value of its real estate portfolio has doubled in size to approximately 600 million over the past 12 months During 2013 its portfolio retail industrial and office properties located throughout Canada grew to a total of 3 5 million square feet of commercial space It says demand for exposure to high quality commercial real estate from institutional and

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    2011 Sentiment was particularly sour in the retail sector where the index dropped almost seven points to 60 Generally businesses are concerned about higher taxes and other costs Some 64 per cent of small business owners cited taxes and costs of complying with government regulation as a major constraint The figure has crept up as businesses fear provincial governments will attempt to balance their books by hiking taxes instead of cutting spending December 23 2013 Most Companies To Keep Bonuses The Same Financial executives don t anticipate bonus levels will differ much this year compared to 2012 says a survey by Robert Half Further at companies where bonuses will change they are more likely to fall than rise Only eight per cent of chief financial officers CFOs at firms that offer bonuses said their bonus levels in 2013 will increase over last year compared to a slightly higher 12 per cent of respondents who expect a decline Sixty two per cent of executives foresee no changes Changes to bonus levels are projected to vary by industry Manufacturing the sector with the largest percentage of CFOs has 33 per cent expecting to pay lower bonuses Whereas workers in wholesale and transportation are likely to receive bigger bonuses with 17 and 14 per cent of CFOs in those sectors respectively anticipating increases this year Twelve Tips For Tax Planning While many Canadians may be aware of the importance of year end tax planning there are some equally important deadlines for implementing tax saving strategies that may only be available in January and February That s why we encourage individuals and business owners to take advantage of some downtime they may have over the holidays to consider some important tax planning strategies says Tony Maiorino vice president and head wealth management services at RBC Wealth Management RBC offers The 12 Tips of Tax Planning as a guide which offers tips for both individuals and businesses For individuals the tips include such things as RRSP and TFSA contributions family income splitting loans labour sponsored investment funds and home buyers plan withdrawals For businesses tips include paying oneself a bonus and the sale of private business shares Read more Canada Can Expect Growth Canadian economic growth is expected to improve in 2014 relative to the lacklustre pace of 2013 says Russell Investments 2014 Global Annual Outlook However the outlook is less optimistic about the impact a strengthening U S economy may have on domestic fundamentals in the coming year While a forecasted U S growth rate of 2 9 per cent would naturally lead to a more positive outlook for the Canadian economy trends such as U S onshoring of higher end manufacturing and greater energy independence will weigh on momentum on this side of the border says Shailesh Kshatriya associate director with the Canadian strategy group at Russell Investments Canada Loyalty Rewards Lack Support While investors corporations fund managers academics and other thought leaders broadly agree that short term investment behaviour does have a negative impact on the way companies make key decisions there is little support for the introduction of loyalty rewards loyalty dividends warrants or additional voting rights says a report from Mercer Stikeman Elliott LLP and the Generation Foundation Building a Long Term Shareholder Base Assessing the Potential of Loyalty Driven Securities identified four main obstacles in utilizing loyalty rewards as a means to overcome the root cause of the short term pressures found in the full investment chain They are discrimination between shareholders due to belief in 1 share 1 vote the risk of unintended consequences administrative complexities and uncertainty that loyalty driven securities would incent a significant change in behaviour and address the root causes of short termism To solve the short termism dilemma the report sets out several solutions It says a longer term perspective and focus on economic value creation is only possible if supported by appropriately aligned performance measurement and reward frameworks As well a more constructive relationship between companies and their long horizon investors is required The report is at Loyalty Rewards Dollar Rise Probable There is a reasonable probability that the Canada dollar can rise somewhat from today s levels says RBC Dominion Securities Inc Its Harbour Group Market Notes show the Canadian dollar had been in a broad range for the past three years trending between US 0 95 and US 1 05 but has recently broken through 0 95 to a three year low Longer term it advocates increasing U S dollar exposure U S economic growth looks poised to pick up and U S monetary policy is shifting toward fewer bond purchases while Canadian policy is likely to remain unchanged at best From a risk management perspective a position in U S dollars has historically acted as an effective hedge to equity market volatility Weak Year Looming For Stocks Despite an improving economic outlook BMO Capital Markets is forecasting a weak year ahead for stocks In its outlook for the coming year it says 2013 saw major equity markets thrive even as the global economy and many other financial markets muddled through another sub par year Those roles may reverse in 2014 It only sees U S and Canadian equity markets recording mid single digit gains with the S P 500 reaching 1 900 by the end of 2014 and the TSX hitting 13 575 It says that the markets reaction to the expected tapering in U S monetary policy is likely the biggest risk to the 2014 call with stocks and bonds struggling in recent days as the inevitably of a less generous Fed sets in December 16 2013 Americans Regain Lost Wealth American households have regained almost all of the wealth they lost during the Great Recession thanks to surging stock prices and recovering home values Total household net worth assets minus liabilities expanded 2 6 per cent or 1 9 trillion in the third quarter from the second quarter says a Federal Reserve report It was the eighth

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    the macro economic environment will be additionally important in the year ahead as brightening global growth prospects would impact positively on the world s major trading nations and commodity producing countries As well its asset allocation team looks past 2014 and anticipates returns for equities and non investment grade bonds including high yield and floating rate loans will outpace traditional bonds in the next five years The report is at 2014 Outlook Equity Funds Post Positive Results For the third consecutive month a majority of equity mutual funds in Canada posted positive results in November with funds that focus on China Japan and the United States showing particularly strong numbers say performance numbers from Morningstar Research Inc Morningstar Canada Eighteen of its 22 fund indices posted increases for the month including 14 categories that were up by more than two per cent The best performer among all the fund indices was the one that tracks the aggregate returns of funds in the Greater China Equity category which increased by 6 5 per cent in November The Japanese Equity Fund Index was also among the top performers in November with an increase of 4 3 per cent its best monthly performance since April The U S Small Mid Cap Equity and U S Equity fund indices increased by 4 5 per cent and 4 1 per cent respectively as economic signals suggested that consumers may be poised to provide a boost to economic growth While stock markets in China and the United States enjoyed strong gains Canadian fund investors in these categories also benefited from favourable currency effects as the Canadian dollar declined by 1 6 per cent last month against the U S dollar the Hong Kong dollar and the Chinese yuan Domestic equity funds had positive but middling results last month December 2 2013 Investors Moving To New Active Investors increasingly will discard traditional and rigid benchmark based active investments in favour of new active outcome oriented strategies during the five years ending in 2018 says a white paper from Casey Quirk Associates LLC Life After Benchmarks Retooling Active Asset Management says these strategies erase the distinctions between categories now labeled traditional and alternative They will attract 3 4 trillion of inflows over the next five years Passive or benchmark tracking investments will take in almost 1 trillion over the same period But traditional active strategies will suffer 1 8 trillion of outflows amid shifting investor demands endangering asset managers worldwide that remain wedded to legacy investments it says Flows into new active mandates including unconstrained bond and equity investments private capital trading strategies dynamic multi asset class solutions and real assets will produce 262 billion of fee revenue close to 45 per cent of the worldwide asset management revenue opportunity generated by manager turnover and net new growth during the next five years Desjardins Launches Innovative Approach Desjardins has launched a range of funds that are managed using an innovative methodology Speaking at the launch event Nicolas Richard chief investment strategist at Desjardins Global Asset Management which manages the approach said it uses a fixed income solution based on rigorous analysis and equity and commodity solutions that seek to exploit the inefficiencies of traditional indexes As well it offers access to new asset classes Canadian equity dividend and global commodities which increase the diversification potential The fees fall somewhere between those of an index and active product but are closer to index fees than traditional active fees It offers six funds across equities bonds and commodities Compliance Manual Is Bible Establishing a culture of compliance starts with a strong code of ethics that is applied everyday both in the job and outside of work says Mary Throop a partner at Summerhill Capital Management She was part of a panel examining the Top 10 Compliance Breakdowns Fixes in 2013 at the Portfolio Management Association of Canada s 2013 Annual Conference AGM As well she said the compliance manual must become the bible for the firm Murray Belzberg president of Perennial Asset Management said however things need to be kept simple Just as business can get very complex very quickly so can compliance Hiring expertise is money well spent and firms need to set the tone when they hire someone by making sure new employees read the compliance manual Zero To 100 In 2 6 Seconds Porsche has unveiled two revolutionary sports cars the Porsche 918 Spyder and the Porsche 911 Turbo S The Porsche 918 Spyder is a vision into the future with a 4 6 litre V8 engine offering 608 bhp and two electric motors delivering an additional 286 bhp for a combined output of 887 bhp at 8 500 rpm With the weight optimized Weissach package the vehicle accelerates from zero to 100 km h in 2 6 seconds with a top speed of 343 km h For the Porsche 911 engineers at Weissach redeveloped 90 per cent of the components for greater engine power and more standard equipment than before as well as the new rear axle steering and the new Porsche active aerodynamics PAA used for the first time in a road car A 3 8 litre boxer twin turbo engine offers 560 bhp between 6 500 and 6 750 rpm for a sprint to 100 km h in 3 1 seconds and a top speed of 318 km h VC Investment Up Sharply Canadian venture capital VC investment rose sharply in the third quarter of 2013 says data from CVCA Canada s Venture Capital Private Equity Association and research partner Thomson Reuters Investment activity in Canada s VC market rose sharply in terms of both deals and dollars in the third quarter of 2013 Disbursements by VC funds totaled 541 million between July and September up 48 per cent from the 366 million invested at the same time in 2012 In the same period the number of VC financing rounds involving innovation based Canadian companies totalled 103 up 17 per cent year over year Dollars invested reached 1 4 billion as of September 30 which is 27 per cent greater than the 1 1 billion invested during the first nine months of 2012 Poverty Among Seniors Rising Poverty among Canadian seniors is on the rise and current pension safety nets may be inadequate to address the problem says a study on global pensions by the Organization for Economic Co operation and Development It shows that Canadians over 65 years of age are relatively well off when compared with most others in the 34 country group of advanced economies The average poverty rate for the group in Canada was 7 2 per cent better than the 12 8 per cent OECD average However it says there are gaps For example as poverty rates were falling in many OECD countries between 2007 and 2010 in Canada they rose about two percentage points Government transfers to seniors in Canada account for less than 39 per cent of the gross income of Canadian seniors compared with the OECD average of 59 per cent meaning more Canadians depend on workplace pensions to bridge the gap It says Canadian seniors depend on income from private pensions and other capital for about 42 per cent of their total but as private pensions are mainly concentrated among workers with higher earnings the growing importance of private provision in the next decades may lead to higher income inequality among the elderly Tribute Held For Fiera CEO A tribute to Jean Guy Desjardins chairman of the board chief executive officer and chief investment officer of Fiera Capital Corporation raised more than 252 000 for the Fondation Montréal inc The tribute was an original way to support Fondation Montréal inc which helps a new generation of Montreal entrepreneurs achieve success by providing start up grants and coaching services To succeed young entrepreneurs must have a vision be able to share and communicate be patient and careful and surround themselves with talent he says November 25 2013 Investors Should Revise Assets Investors who previously adopted a strategic approach of diversification to spread out risk should now revise their positions and the combination of their assets Laurentian Bank Securities The prevailing market context is showing a slightly positive trend in the wake of a period of considerable volatility it says creating an environment where investors may want to look at how they now managing risk While the recovery is ongoing it is slow and there are no inflationary pressures The bond market is currently characterized by rates that are slightly on the rise after having posted historic lows While short term fixed income securities are under performing stock markets are showing an upward trend Certain stocks are breaking away from the pack in particular Canadian Companies Confident But Cautious For the first time in two years U S companies are more inclined to pursue deals than their Canadian counterparts According to EY s Canadian Capital Confidence Barometer only 33 per cent of Canadian companies intend to pursue acquisitions within the next 12 months compared to 41 per cent in the U S There s still an interesting confidence paradox going on here Canadian executives remain confident in the state of the global economy and even more confident in the economy here at home says Tony Ianni transaction advisory services partner at EY But that confidence still isn t translating into an uptick in transaction activity Accordingly Canadian executives confidence in the local economy continues to rise Ninety eight per cent of respondents think the Canadian economy is stable or improving up from 79 per cent a year ago Despite increasing confidence Canadian companies either seem to be waiting for more favourable economic conditions for the right deal or in some cases for someone else to make the first move says Ianni Porsche Adds Compact SUV Porsche is expanding its range to include the Macan the first Porsche model to break into the compact SUV segment Its name comes from the Indonesian word for tiger The Macan combines the typical handling characteristics that include maximum acceleration and braking values strong engine power agility and steering precision teamed with a high level of comfort and everyday suitability The vehicle has a flat and broad profile on the road The wraparound bonnet and gently sloping roof line accentuate its sporty elegance and powerful dynamics Many of the design elements have been taken from other Porsche sports cars and enhanced for the Macan The line is set up to produce around 50 000 vehicles per year Mark to market Impact Negligible The impact of using a mark to market accounting method for valuing pension liabilities will have a negligible effect on companies says an SEI research paper Considering a Switch to Mark to Market Accounting An Understanding of Potential Stakeholder Reactions examines the impact the accounting method had on 23 major U S companies that implemented mark to market accounting for their defined benefit plans over the past two years It found returns on share price in the period surrounding the earnings announcement show no statistically significant abnormal return values financial analysts reports and quarterly earnings calls show very few questions and no direct criticisms of the mark to market implementations by companies and internal management receives the benefit of removing drags on earnings which ultimately gains more favourable earnings per share without the penalty of past poor performance It also shows that ratings agencies such as S P Moody s and Fitch already use mark to market accounting as part of their longstanding practices CLHIA Proposes Ultra long Bonds Federal policymakers should consider issuing ultra long government bonds bonds with maturities of 40 years or longer says the Canadian Life and Health Insurance Association CLHIA Commenting to the Bank of Canada and the department of finance debt management strategy consultations it says the move would be good from both the government s point of view and for long term investors From the government s perspective issuing ultra long bonds would be good asset liability management given the long term nature of the government s assets it says It would also allow the government to ensure low cost funding for its financial needs As well it would attract a broad investor base of domestic institutional investors that are actively seeking longer term investments Long term institutional investors would likely be a strong source of that demand particularly insurers which typically have substantial long term liabilities Companies Keep Tight Hold On Costs Canadian companies may be more optimistic about access to credit but they re keeping a tight hold on costs ahead of investing for growth In fact 60 per cent of companies expect cost reduction and process efficiency to be the most important areas of focus when it comes to business improvement over the next two years says Optimizing for Growth Working Capital Credit Availability a Canadian Financial Executives Research Foundation CFERF study Despite positive indicators the economic environment remains uncertain and while Canadian financial executives are optimistic about their economic prospects and access to capital for growth 56 per cent say they failed to meet revenue growth targets over the past year and 55 per cent are focused solely on organic growth in the next 12 months It found that efficiency and cost control followed by risk management continue to be the boardroom focus of many Canadian companies It also showed that although they have been focusing on their core business by optimizing their capital structures there are signs that point to increased transaction activity November 18 2013 Canadian Regulatory System Deemed Superior Canada s regulatory system is thorough progressive and in many cases superior to those of the U S the UK and Australia says a legal analysis of current and contemplated obligations of financial advisors to act in their clients best interests The report by Torys LLP was at the request of the Investment Funds Institute of Canada IFIC and the Investment Industry Association of Canada IIAC to address and clarify statements included in Canadian Securities Administrators Consultation Paper 33 403 The Standard Of Conduct For Advisers And Dealers Exploring The Appropriateness Of Introducing A Statutory Best Interest Duty When Advice Is Provided To Retail Clients The UK and EU already impose a qualified best interest standard on their advisors Laura Paglia a partner at Torys says the terms fiduciary and best interest are over used casually and interchangeably to describe a wide range of possible and unclear obligations When we looked at the content of the obligations of investment advisors in the U S the UK and Australia she says we found that none of these jurisdictions have or are considering more onerous requirements than those already in place in Canada The conclusion after reviewing the content and source of the obligations is that the applicable rules guidances and notices of the IIROC and the MFDA fully inform investment advisors professional standards in manners consistent with if not superior to approaches in these other jurisdictions Read analysis Sun Life Rolls Out Corporate class Funds Sun Life Global Investments the mutual fund arm of Sun Life will roll out corporate class funds aimed toward more affluent clients as its initial foray into offering private client products says Rick Headrick president of Sun Life Global Investment The company will offer corporate class funds with higher minimum investments early next year and will also provide customized reporting to investors Corporate class funds are deemed more tax efficient because they allow investors to move assets from one type of fund to another without triggering a tax event Book Pinpoints Tips For Wealth Management The management of family wealth has always been a challenge even in the best of times It has become even more difficult in a world where consistent income and capital growth are hard to generate where the old rules of investing no longer provide reliable guidelines and where the balance between family and finances is more precarious than ever Family Wealth Management 7 Imperatives for Successful Investing in the New World Order is a book co authored by two global leaders in the management of family wealth Mark Daniell the founder and chair of the Raffles Family Wealth Trust and Tom McCullough chairman and CEO of Northwood Family Office and an adjunct professor at the University of Toronto s Rotman School of Management The book provides a fully integrated and family centric approach to wealth management It addresses the family s philosophy of wealth and the development of its goals its approach to structuring and allocating financial assets and the importance of engaging and educating family members along the way Philanthropy More Than A Tax Relief Strategy Many high net worth HNW Canadians are once again focused on philanthropy says a report by BMO Harris Private Banking In fact 48 per cent of respondents say they are now donating the same amount as they did before the recession while 36 per cent claim to be donating more As such advisors need to think carefully about their charity related conversations with clients Advisors often make the mistake of focusing on the tax benefits of charitable donations during client conversations rather than the person s reasons for giving says Marvi Ricker vice president managing director philanthropic services BMO Harris Private Banking in Toronto Advisors need to make the assumption that the client is interested in the issue and is trying to support a cause that s important to them she says rather than just looking for tax relief Once a client has made a firm decision as to how much he or she intends to give to a favourite cause advisors can then discuss how best to make the donation with taxes in mind Fed Wars Against Gold The U S Federal Reserve has spent 100 years robbing the public of its wealth says Nick Barisheff founder president and CEO of Bullion Management Group Inc In a presentation at the Toronto Austrian Scholars Conference The Federal Reserve s Centennial Birthday

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