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  • Private Wealth Canada News
    significant increase from the 11 per cent who were bearish in the first quarter SMEs In Canada Lose Confidence Confidence among Canada s small and medium size businesses continued to fall in June says the Canadian Federation of Independent Business CFIB The Business Barometer index dropped from 64 8 in May to 62 1 essentially wiping out the gains made since last summer The weight of concern over the prospects for world economies continues to push business confidence down in Canada says Ted Mallett CFIB s chief economist and vice president If there is any good news it is that our numbers suggest the economy is still growing albeit at a slow pace Business owners in Alberta and Saskatchewan have collectively been the most optimistic in Canada for 11 consecutive months while entrepreneurs in Manitoba New Brunswick and British Columbia are comfortably above the national average Those in Newfoundland and Labrador are close to average Optimism is lagging in Ontario Quebec Prince Edward Island and Nova Scotia Talent Retention Key Issue With improvement in the economy employers are finding it more difficult to retain key talent says Retention of Key Talent and the Role of Rewards a report published by WorldatWork an association of total rewards professionals in collaboration with the Hay Group a pay consultancy and Dow Scott Ph D professor of human resources at Loyola University Chicago The majority of respondents 83 per cent thought that failure to retain key talent is very costly and two out of three agreed that retention of key talent is a major concern for senior management Survey responses indicated the top reason key talent leaves is to get higher pay elsewhere Other reasons include lack of promotional opportunities the perception that pay is unfair and dissatisfaction with job and work responsibilities Talent wars are going to become intense not just this year but for at least a decade because jobs are becoming more complex and demanding Baby Boomers are retiring and Generation X has far fewer people who can fill this gap and other countries are retaining their most talented people with great job opportunities of their own says Scott Respondents indicated the most effective methods for retaining key talent are identifying key employees and discussing their future opportunities in the organization with them paying them above the labor market and allowing flexible hours or telecommute options July 3 2012 Finance May Soften PI Rules Strict new tax measures creating a class of so called prohibited investments in registered accounts are likely to be revised says the federal Department of Finance It has indicated that it is prepared to soften the new rules put forward in the March 2011 federal budget and partly aimed at preventing large shareholders from unfairly sheltering their gains The PI rules use a complex set of mechanisms to end the practice by some taxpayers of sheltering shares in the companies they own control or have significant interests in by placing these shares in registered accounts Taxpayers who own or control private companies and place the shares of these companies in an RRSP could unknowingly run afoul of the new rules which call for punitive penalties equal to 50 per cent of the fair market value of the PI In addition any growth derived from the PI in the registered account is 100 per cent taxable Transitional rules allow taxpayers to move their PIs out of sheltered vehicles within certain time periods but with potentially big tax hits Changes to World Economy Leave Canada Behind Canada is not keeping pace with changes to the world s economy says Winning in a Changing World from the Norman Paterson School of International Affairs at Carleton University Despite recent developments in trade talks with Asia and Europe the report reflects the broad fear of Canadians that we are failing to seize the moment and are instead allowing world events to dictate our economic path and future prosperity Canada must instead reach out to significant emerging markets to secure its economic future as depending almost exclusively on Western economies for future prosperity is not sustainable it says It makes 14 recommendations to governments and business leaders designed to build a new national consensus like the one that championed the first Canada U S Free Trade Agreement and subsequently NAFTA Included in their recommendations are more deliberate trade and investment strategies that harness Canada s comparative advantages with select emerging markets Say On Pay Opportunities Growing The number of Canadian issuers that have agreed to provide their shareholders with the opportunity to vote on an advisory resolution on executive compensation or say on pay vote has slowly continued to increase says The State Of Say On Pay by Andrew J MacDougall a partner at Osler Hoskin Harcourt LLP and Vanessa Cotric a summer student working in the pensions and benefits labour and employment and research groups at the firm The number of Canadian companies that have agreed to hold say on pay votes has reached 97 up from 70 in May 2011 The article is at Say On Pay Global Gloom Hits Home Global gloom is starting to hit home says a Deloitte survey of chief financial officers at North America s biggest firms adding that this will curtail investment and hiring growth In Canada CFOs were still largely positive with a difference of 42 percentage points between those who felt their firm s prospects would improve over those who felt they would worsen down from the plus 57 results of the last quarter but still far more upbeat than they were at the end of 2011 By contrast U S CFOs were the most pessimistic with an equal number answering the question negatively as positively Sentiment among Mexican chief financial officers was in the middle Canadian executives were also more optimistic about the unemployment situation only 16 per cent ranked it as a top concern compared with 59 per cent in the U S Executives Remain Connected During Vacations As executives plan their summer getaways many of them will not leave the office completely behind says the Robert Half Management Resources survey Sixty one per cent of chief financial officers polled say they check in with the office at least once or twice a week while on vacation up from 58 per cent in a similar survey in 2005 Only thirty six per cent remain completely disconnected during their vacation As executives focus on multiple business challenges in today s work environment they may feel that taking a vacation and staying disconnected from the office may put them further behind in terms of productivity says David King Canadian president of Robert Half Management Resources who advises that even a short break can help executives feel recharged and refreshed Making time for a getaway also sets a positive example for other employees who otherwise may feel guilty completely disconnecting while on vacation Canadian Managers Increasingly Bullish With Canada s financial markets being buffeted by concerns about Europe s financial situation Canadian investment managers have become increasingly bullish on Canadian equities as valuations have fallen says Russell s second quarter Investment Manager Outlook Not surprisingly headline or macro event risk is seen as the greatest challenge facing active managers at this time according to 86 per cent of investment managers polled It found 70 per cent of investment managers surveyed are bullish on Canadian equities while only 25 per cent are bearish By comparison 56 per cent were bullish in the first quarter and only 43 per cent were bullish a year ago at this time The sell off in April and May has improved valuations and that has led to increased bullishness in Canadian stocks says Greg Nott chief investment officer Russell Investments Canada Limited In addition despite gaining in the first quarter Canadian equities lagged their global counterparts in that period making their relative valuations even more attractive Assessing the Canadian market as a whole 73 per cent of investment managers say it is undervalued That is a big shift from the previous quarter when only 17 per cent of investment managers thought the Canadian market was undervalued Eurozone About Containment Not Cure Focus on the European debt crisis is and always was about getting it out of the headlines not about a cure says Warren Jestin senior vice president and chief economist at Scotiabank Speaking at the ISCS Canadian Economic Update Breakfast he said that resolution strategies have not resolved the crisis and have in fact left Greece with a very unhealthy debt ratio Last fall was a game changer he said because investors began to see Greece as a mathematically impossible situation The fallout from that resulted in other countries getting caught up in the tailspin and those that were once seen as solution countries have moved or have the potential to move to being problem countries France once viewed as a strong solution is at risk of losing its AAA rating and may potentially join the problem and Germany s underlying political and social issues could move it from being the biggest potential solution to being a part of the problem as well At a time when people are asking when they will stop hearing about the Eurozone crisis Jestin said it will be an ongoing issue for at least five more years Canadian Portfolios Take Flexible Approach While some factors dominate the Canadian market they do not do so consistently through different market cycles says research from Pyramis Global Advisors Leadership Series The Search for Consistent Returns says this means constructing portfolios based on a single favourable characteristic or style can lead to the exclusion of a significant number of strongly performing stocks in addition to capturing many underperformers The analysis also suggests that an approach to portfolio construction based on more flexible and factor agnostic security selection criteria offers the potential to generate relatively strong and perhaps more consistent risk adjusted returns across varied market conditions Research specific to the Canadian market also shows that value and momentum factors were the most successful and consistent at predicting outperforming stocks However they did not necessarily outperform other factors when examined individually in down markets or up markets SRI Downside Protection Not Proven Socially responsible investing SRI strategies alone have not improved the average risk return profile of a European equity fund in the recent past says a report from Fitch Ratings It says even on a longer term basis including 2008 downside protection is not statistically proven In fact while exhibiting similar Total Expense Ratios SRI funds have on average underperformed non SRI funds by 0 6 per cent annually over the past three years in the European and eurozone equity Lipper categories However the report acknowledges that this doesn t take into account the non performance related benefits that SRI investors may receive such as the carbon footprint or social impact of their investments June 25 2012 Wills Alone Will Not Do Wills do not address potential incapacity and other health issues and for many Canadians health directives and a general Power of Attorney POA or other financial directives will likely be needed before a will is invoked says the RBC Myths and Realities poll It shows that while most retired boomers 81 per cent have a current will only half 49 per cent have a current health directive and even fewer 39 per cent have a current financial directive Financial planning is not complete without planning for potential unforeseen health issues or incapacity says Suzanne Michaud senior advisory counsel at RBC Law Group Your plan should address your wishes relating to personal care and include the right documents in place to appoint someone to act upon your behalf for both property and personal care matters She adds that Canadians recognize the reality of aging and health concerns but they are not taking action while they are young enough to address this reality without undue pressure or failing health Inheritance Not A Given Thirty two per cent of high and ultra high net worth Americans don t feel it s important to leave an inheritance for their children says U S Trust Bank of America s private wealth management division The report which classified individuals with 3 million or more in assets as high net worth and those with more than 10 million in assets as ultra high net worth coincides with a survey by Merrill Lynch says the importance of giving an inheritance has fallen from 54 per cent in 2009 to 41 per cent in 2012 It indicated that 25 per cent would rather give their money to charity while the majority planned to withhold funds because they thought each generation should earn its own wealth Others were more concerned with future healthcare costs and whether they would have any money left to bequeath Of the survey respondents who plan to pass on their wealth the majority felt it was important to keep money within the family and that doing so would have a positive effect on their children s lives Luxury Sector Proves Resilient The luxury sector in Canada has proven its resiliency in economic uncertainty as compared to Europe and the U S says American Express Business Insights Optimism amongst Canadians appears to be on the rise as luxury spending increases but what has proven most surprising is that in a soft job market younger Canadians are dominating luxury spending growth in the core areas of fashion travel and fine dining The findings are based on actual aggregated spending data from 2009 through 2011 and suggests that not only was the Canadian luxury sector less impacted by the downturn down nine per cent in 2009 than its counterparts in the U S and Europe down 14 per cent and 10 per cent respectively but that Europe and the U S have yet to reach pre recessionary spending levels in the luxury segment whereas Canadian luxury spending has increased overall since 2009 Home Bias Conscious And Intentional Even though there is general agreement on the importance of exposure to a variety of asset classes dependent of course on investor specific factors there is less agreement on the role of foreign securities in a domestic portfolio says a research paper from Vanguard The role of home bias in global asset allocation decisions says investors display a persistent and significant home bias regardless of domicile which often conflicts with the tenets of broad global diversification It is interesting that this bias is often conscious and intentional it says with investors actively overweighting domestic holdings at the expense of foreign securities Gordon Sees ETFs Evolve Once very simple and useful tools for tracking a market the original ETFs were capitalization weighted tools says Barry Gordon president and CEO of First Asset Capital Corp In an interview with Private Wealth Canada staff writer Karen Treml he outlines the evolution of ETFs and how these simple tools have grown into strategies that include several different types of fundamental factors in weighting stock and in choosing stocks to include in an index and the weighting thereof Gordon cautions however that as with any investment people need to understand exactly what it is they are investing in and need to match up the investments with Professionals Advise Medjet Medjet Assist an air medical transport membership program for savvy travelers has appointed its new advisory board which includes company spokesperson Jim Furyk the 2010 PGA Tour Player of the Year Bart Starr an NFL Hall of Fame member Dr James Andrews noted sports orthopedic physician and R D Hubbard a prominent developer and Bighorn Golf Club founder Roy Berger president and CEO of Medjet is hopeful the group of professionals can help spread the company name and value of the membership MedjetAssist arranges medical transfer to the hospital of the member s choice in the event a member becomes hospitalized more than 150 miles from home and meets transport criteria Uncertainty Spreads To World Uncertainty about the ability of European political and financial authorities to resolve an unending crisis is spreading to the world says the Desjardins Group Economic Studies team François Dupuis Desjardins Group vice president and chief economist says It would be overly optimistic to think that the global problems of public and private debt will be resolved quickly Patience is in order However the report says investment remains healthy in Canada and the economy should grow by 2 1 per cent in 2012 and 2 4 per cent in 2013 Canada has a considerable asset it has major commodity reserves that are benefiting from sustained global demand The forecast for global growth is established at 3 1 per cent for 2012 and 3 7 per cent for 2013 Emerging nations will see their real GDP growth slow from 5 7 per cent in 2011 to 4 8 per cent this year then regain some momentum in 2013 reaching 5 5 per cent Europe s economic environment remains difficult Countries in the euro zone are struggling under the burden of the austerity programs needed to clean up their public finances The euro zone s real GDP will contract by 0 5 per cent this year followed by a 0 7 per cent recovery next year As a result the downside pressure on interest rates will continue until late 2014 Small Cap Provides Diversification Small cap stocks can be a diversification vehicle for Canadian investors says Joseph H Chi co head of portfolio management and vice president at Dimensional Fund Advisors In its session Canadian Equities Outside the Box he said Canada is now an important market for investors It stands at 4 3 per cent of world market capitalization up from 2 2 per cent in 2002 This puts it behind the U S UK and Japan However while the U S accounts for 46 2 per cent of world market capitalization the UK and Japan are only 8 2 per cent and 7 9 per cent respectively While the

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  • Private Wealth Canada News
    governments investors and companies scramble to prepare for the chaos that could arise from a Greek exit from the euro zone it is interesting to note that few seem at all concerned about how global foreign exchange markets would function amid a sudden breakup of one of the world s major currencies The reason says the Greenwich Associates The Impact of the Greece Crisis on Global FX Markets is the global FX market is perhaps the most liquid robust and well functioning market on the planet As well since a Greek government determined to exit the euro would have every incentive to cut the cord as quickly as possible to stem capital flight what was built over the course of years could split essentially overnight It also says due to recent efforts by the EU the ECB national governments companies investors and to the longer term evolution of FX into perhaps the world s most liquid and resilient marketplace a euro breakup is unlikely to materially disrupt the normal functioning of global foreign exchange trading Gold Conditions Remain Despite a move down in gold prices in recent day and weeks the conditions that drove the price of gold to record highs have not gone away says Nick Barisheff CEO of Bullion Management Group He says in many ways they are worse than before and people are being complacent and out of touch with the new economic realities the world now faces Holding cash for portfolio protection does not work The five major currencies have shown dismal performance versus gold since 2001 he says and more funds and fund managers are now stating that allocations between five per cent and 10 per cent to bullion are prudent He cites Kevin O Leary chairman of O Leary Funds and star of ABC s Shark Tank and CBC s Dragon s Den who has owned gold for decades and maintains a five per cent weighting When the price dips and his weighting drops he says O Leary buys into weakness Real Estate In Canada Overpriced At a country level U S and Canadian real estate is broadly overpriced says Aberdeen Asset Management s Global Real Estate Market Outlook It says however investment opportunities can be found in retail warehouses and certain suburban apartment and office locations throughout both countries At a segment level Canadian offices are highly overpriced and are likely to underperform over the next few years However it expects capital value to fall eventually providing buying opportunities Better value can be found in Canadian retail which offers the highest five year total return in its projections The best investment opportunities in Canada are likely to be in the western provinces where rents grow on a real basis and the economies are driven by the energy industry Calgary AB in particular is gaining relevance in the financial services industry Retail properties located near overbuilt suburban housing markets in Toronto ON and Vancouver BC are likely to be the most negatively affected should a housing correction materialize Hedged Global Bonds Improve Profile For many investors particularly those seeking assets to match long term liabilities adding exposure to hedged global bonds can improve the risk return profile of their portfolio versus a domestic only bond portfolio says AllianceBernstein s LDI Reducing Downside Risk with Global Bonds It says exposure to global bonds offers what amounts to a natural hedging strategy against domestic tail risk as while global bonds have a high correlation to domestic long term bonds they protect against large downside losses in domestic bonds As well the ability of a hedged portfolio of global bonds to reduce downside risk while capturing most of the upside potential return creates an opportunity to improve a pension plan s funded ratio relative to its liabilities However while global bond exposure has many positives it says it would not advise liability driven investors to convert their entire fixed income portfolios to global bonds There is generally a close correlation between returns for domestic only long bonds and hedged global bonds but the gap between the two can be significant at times Financial Industry Should Be Barbell ed The financial industry needs to be barbell ed with those who can take risks on one side and those who shouldn t on the other says Nassim Taleb author of Fooled by Randomness and The Black Swan Speaking at an AIMA Canada session he said the more robust an industry the better suited it is to take risk He cited the number of hedge funds that fail each year yet no one hears about it The investors who suffers those losses are the ones able to take on this risk of loss and the fact that new blood comes in to replace those funds helps keep it robust Banks and insurance companies on the other hand should not be allowed to take on risk because their business model is to make small profits over several years because if they suffer a huge lose it has an impact on the system Better Boards Smaller In the end either you have a great board of directors or you don t have a great board of directors says Robert Pozen former chairman of MFS Investment Management currently a senior lecturer at the Harvard Business School and a senior research fellow at the Brookings Institution and author of Too Big to Save How to fix the U S Financial System He told the annual meeting of the Canadian Coalition for Good Governance that one of the problems is most boards are too big Boards with 16 to 18 members can result in social loafing where directors are content to let other board members take care of issues The ideal board in his opinion would have six independent members and the CEO These smaller boards can reach a consensus faster enabling them to take action faster He also suggested that boards should have at least half of their members with some experience in the

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  • Private Wealth Canada News
    seven years Women already control 60 percent of the nation s personal wealth they outnumber men and they are traditionally the shoppers says financial expert Scott T Schultz author of Scott Schultz s Guide to Closed End Funds With the first of the boomers hitting 65 this year the U S will see an even greater number of retirement aged women holding the country s purse strings Many will inherit money and property from their parents and or their husbands and many will live another 30 to 40 years Schultz says citing a Cornell study They ll need to invest their money to ensure they have enough to avoid that impoverished retirement they fear Insurance Planning Review Timely Now Now an opportune time for people to review insurance planning initiatives says The Harbour Group RBC Wealth Management Dominion Securities In the article Federal Budget Impacts Financial Plans at Private Wealth Canada it says proposed changes in the federal budget may result in a reduction of the savings component that is permitted to grow on a tax sheltered basis with an exempt policy This would not eliminate the value that the savings component provides but does limit the attractiveness of the feature For those with term policies in place now would be a crucial time to review the policy to check if it is convertible to permanent coverage Crestpoint Makes 12th Acquisition Crestpoint Real Estate Investments Ltd has completed its 12th acquisition in just over one year of operation Part of the Connor Clark Lunn Financial Group it has acquired a 50 per cent interest in a shopping centre located in Brantford ON This transaction brings to completion a solid first year of operation says Kevin Leon its president We are pleased to have amassed such a high quality portfolio of commercial retail office and industrial real estate assets that now exceed 180 million in assets under management Equity Funds In Negative Territory After posting solid returns during the first three months of 2012 most equity funds in Canada were in negative territory in April say preliminary performance numbers from Morningstar Research Inc Among its Canada fund indices that measure the aggregate performance of equity fund categories only four managed to stay positive last month Balanced funds for the most part had flat or slightly negative returns Within the diversified equity categories funds that invest outside of Canada typically had a harder time than their domestic counterparts in April The Japanese equity fund index one of the worst performers decreased by 3 9 per cent but still outperformed the benchmark Nikkei 225 index s 5 6 per cent loss thanks to the appreciation of the yen versus the Canadian dollar Also near the bottom were the fund indices that track the European equity emerging markets equity global equity and international equity categories with pullbacks ranging from 2 2 per cent to 2 8 per cent Active Management Environment Continues The favourable active management environment that ended 2011 has extended into 2012 with 66 per cent of large cap Canadian equity investment managers outperforming the S P TSX Composite Index s return in the first quarter says the Russell Active Manager Report That compares to 76 per cent who beat the benchmark in the fourth quarter of 2011 The median large cap manager return was 5 3 per cent compared to the S P TSX Composite Index s return of 4 4 per cent It was another excellent quarter for active managers overall says Kathleen Wylie senior research analyst at Russell Investments In fact taking the fourth quarter into account the back to back percentage of managers beating the benchmark was the highest since 2004 Fundamentals mattered in the quarter with the market focused more on company specifics and less on the macro environment On average over the last 10 years 52 per cent of large cap managers have beaten the benchmark SMEs Less Optimistic Canada s small and mid sized businesses SMEs were less optimistic in April than the month before says the Canadian Federation of Independent Business CFIB A 1 3 point drop in its Business Barometer Index to 66 4 gave back most of the gains seen earlier The reading remains the second best reading for the year and is the first decline the index registered since August last year For the most part overall survey findings still point to stable business conditions and a modestly growing economy says Ted Malett chief economist and vice president for CFIB The outlook for business owners both by sector and by region shows very little relative change in April which is also another sign of general stability April 30 2012 Ontario Hikes Tax On Wealthy Ontario will hike taxes for the wealthy in order to stave off another election The minority Liberals have agreed to an NDP demand to surtax those earning more than 500 000 and all money raised by the surtax about 470 million next year will go towards paying down Ontario s 15 2 billion deficit The surtax will end once the budget is balanced in 2017 Trust Ruling Confirmed The Supreme Court of Canada the SCC has confirmed the original ruling of Woods J of the Tax Court of Canada the Tax Court that the central management and control test used to determine residency of corporations for tax purposes also applies to the determination of the residence of trusts Jeffrey Shafer and Ed Kroft of the tax group at Blake Cassels and Graydon LLP examine the decision in Fundy Settlement v Canada a k a St Michael Trust Corp or Garron Family Trust at www bpmmagazine com The article is at Trust Decision Amendment Restores IPP Effectiveness Only a small number of Individual Pension Plan IPP will be affected by the new federal tax measures says Michael Marmoreo business development manager group savings and retirement with Industrial Alliance Writing in the article Pensions IPPs Are Alive And Well at www privatewealthcanada ca he says that Finance Canada has

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  • Private Wealth Canada News
    headaches Its features include mass compensation deduction contribution and organizational updating tools a newly designed easily navigable user interface and customers can access it from their choice of mobile device Equity Fund Performance Lacklustre Equity funds in Canada posted lacklustre performance in March but most posted gains many in the double digits for the first quarter of 2012 say preliminary performance numbers from Morningstar Canada Among its 22 fund indices eight increased by more than 10 per cent while only one had a negative result for the quarter The top performer for the quarter was the Morningstar U S equity fund index which increased by 11 4 per cent its best result over any three month period in more than a year The biggest losers in March were the natural resources equity and precious metals equity fund indices which were down 8 4 per cent and 10 6 per cent respectively Sentiment Returns To Normal Small business sentiment has now returned to what can be considered normal for a sustainably growing economy says the Canadian Federation of Independent Business CFIB Business Barometer Index With its seventh consecutive monthly gain since late last summer it climbed to 67 7 in March more than a point and a half above February s level and six points above its August 2011 low Even though government debts continue to cast a shadow the small business community is confident that increased government spending restraints will help to encourage domestic business activity says Ted Mallett vice president and chief economist for CFIB Business owners in Alberta 74 6 and Saskatchewan 72 continue to be the most optimistic in the country Big gains in business sentiment in Ontario 68 2 pushed its index above the national average for the first time in a year and a half There s improving optimism in Manitoba 69 8 Quebec 64 6 and Nova Scotia 64 1 while levels fell back somewhat in British Columbia 63 8 and New Brunswick 66 April 2 2012 Factors Determine Family Involvement Different factors determine whether a family is involved in managing a business and therefore in managing the family s wealth says a study from Forbes Media These factors include the life cycle of the economy and that of the business its sector of activity the geographic region where the company carries out its business and the obligations imposed by society Key findings show nearly half of these large fortunes are run with family involvement while the other half are managed by individuals Family managed fortunes are concentrated in certain regions of the world and hardly exist in others Mature markets have more fortunes that are run with family involvement than is the case in emerging markets The highest percentages of family run businesses are found in Hong Kong India and the Middle East while the lowest rates of family run fortunes are seen in Russia or China where the free market is a relatively new phenomenon It also shows individual fortunes grow more rapidly than family run fortunes Variety Of Reforms Necessary Delivering quality investment advice isn t just a question of the appropriate compensation structure a variety of reforms are needed to ensure the quality of advice says a report from Deutsche Bank Research It argues that both commission and fee based remuneration structures should continue to be allowed in order to meet the needs of different sorts of clients However it acknowledges that reforms are necessary For example it says a ban on commissions won t solve all forms of mis selling While a commission ban would solve the issue of mis selling due to the payment of trailer fees that influence product recommendations it maintains that there are still other forms of bad advice that are not due to the method of remuneration such as improper investor classification or improper assessment of product features It recommends that having unconditional transparency on remuneration payments flowing from a product maker to an advisor would allow both models to exist Corporate Canada In Better Shape Corporate Canada is in better shape than it was before the recession and its strong financial health should help it weather any short term challenges and take advantage of growth opportunities says a composite indicator developed by CIBC World Markets Inc It s encouraging that a health check on Canada s corporate sector shows businesses across the country passing with flying colours says Avery Shenfeld its chief economist History points to a solid medium term outlook when the various indicators in our composite are in a position of strength The strength in Corporate Canada runs across sectors and the indicator was not driven up by the performance of one or two major industries In fact improvements in cash positions and profit margins over recent years are more impressive when the energy sector is excluded IIROC Can Use CRM Model The Investment Industry Regulatory Organization of Canada has received approval to begin implementation of its reform package Designed to enhance the relationship between investors and their financial advisors the amended rules in the Client Relationship Model will be implemented in stages effective immediately Its reforms provide greater disclosure requirements for advisors and enhance the standards they must meet when assessing the suitability of investments for their clients The objective is increased transparency for investors surrounding the fees they pay the services they receive potential conflicts of interest and the performance of their accounts Stewart Declines Cash Bonus Sun Life Financial Inc s retired chief executive Donald Stewart declined his cash bonus for 2011 because of the life insurance company s poor financial performance last year Stewart who retired November 30 received total compensation for his 11 months in 2011 of 6 85 million which includes a salary of C 1 million and share awards valued at C 2 75 million Dean Connor who succeeded Stewart received total compensation of 5 12 million including 743 577 in salary a 500 000 bonus and share awards and options valued at 3

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    liability lawsuit in this uncertain time of high unemployment and tepid economic growth says a study by ACE Private Risk Services the high net worth personal insurance business of the ACE Group Despite their concern many wealthy families remain poorly prepared for such lawsuits underestimating the cost of potential damages and misunderstanding the affordability of effective protection Targeting the Rich Liability Lawsuits and the Threat to Families with Emerging and Established Wealth shows more than two thirds think public perceptions of the wealthy have grown more negative since 2008 Almost 40 per cent believe they are more likely to be sued in the aftermath of the economic crisis compared to only seven per cent who say they are less likely to be sued And more than 80 per cent agree their wealth alone makes them an attractive target for liability lawsuits BMG Celebrates 10th Year The backdrop for Bullion Management Group Inc product demand is the relentless build up of sovereign debt and global issuance of fiat currencies with no gold backing says Nick Barisheff its founder president and CEO In remarks to mark its 10th anniversary the firm s first NAV was posted on March 5 2002 he said Although much of the attention has been on central bank purchases since they became net buyers of gold bullion in 2009 the real impetus for what I am convinced will be further rises in bullion values are the pension and insurance funds that at this point hold less than half of one per cent of their assets in gold and mining shares he says Continued losses and growing pension deficits will make it mandatory for them to eventually include gold the one asset class that is negatively correlated to financial assets such as stocks and bonds Today BMG has 642 million of assets under management and global sales from 57 dealers in 14 countries Integra Offers Nuveen Strategies Integra Capital Limited has entered into an agreement with Nuveen Asset Management to partner with and enhance the firm s current distribution capabilities as it serves a growing community of Canadian institutional clients Integra will have access to Nuveen s full investment capabilities but will limit its initial focus to a number of key areas where Integra believes there is an attractive match between growing market demand and Nuveen s expertise Nuveen is an independent affiliate of Nuveen Investments which currently manages more than 2 billion for Canadian investors Strategies to be introduced include global high yield fixed income global infrastructure and U S dividend value Russell Enhances LifePoints Russell Investments Canada Limited has enhanced its LifePoints Portfolios line up providing Canadian investors with a broader range of multi asset solutions for their investment needs Two new portfolios have been introduced and it has further diversified the fixed income allocation in its existing portfolios through exposure to global high yield bonds and emerging markets debt Bond Yields Disappearing Bond yields are disappearing says a Segal Advisors Research Note It says this is a concern for investors because yield provides the majority of the long term total return for a fixed income investment At approximately two per cent the yield on the 10 Year Government of Canada Benchmark Bond is at the lowest level since 1982 Moreover the yield on most high quality bonds is now below the current rate of inflation Negative real interest rates the yield on bonds net of inflation means the interest income is not sufficient to offset the erosion of purchasing power from inflation It is tantamount to sacrificing a portion of principal at redemption in return for safety Investors need to consider the portfolio implications given the Bank of Canada s intention to maintain short term rates at one per cent in light of the bank s modest growth projections over the next two years Hedge Funds Not Shadow Bankers Credit hedge funds should not be considered part of the shadow banking sector says a paper by the Alternative Investment Management Association AIMA Its research paper highlights crucial differences between the key functions of a traditional bank and those of credit hedge funds and other non bank financial institutions For example credit hedge funds do not take deposits and do not offer daily liquidity or otherwise hold themselves out as guaranteeing the return of the invested principal They manage their liquidity profiles by agreeing to investor redemption terms which correspond to the liquidity profile of the underlying investments They therefore do not engage in significant maturity transformation Crucially hedge funds do not benefit from implicit or explicit taxpayer guarantees The G20 mandated the Financial Stability Board FSB to develop recommendations to strengthen the oversight and regulation of the shadow banking system in November 2010 but there has been considerable debate about what constitutes a shadow bank Recent G20 language referred to money markets funds securitization securities lending and repo activities and other shadow banking entities Funds Have Solid Showing After a strong start to the new year in January investment funds in Canada had another solid showing in February as all but one of the 24 Morningstar Canada Fund Indices that track equity categories had positive results for the month Its preliminary performance data show 18 had increases of more than two per cent and all 11 balanced fund indices were also in the black Foreign equity markets generally outperformed their Canadian counterparts last month and as a result foreign equity funds dominated the rankings The best performer was the one that measures the European equity category which rose by five per cent Among domestic equity funds the Canadian equity fund index rose by 1 7 per cent in February matching the return of the S P TSX Composite Index Small Businesses Remain Confident Small business confidence reached 66 in the last month its sixth consecutive monthly increase says the Business Barometer Index from the Canadian Federation of Independent Business The index however still has a few points to make up before re establishing the high levels seen this time last year Small businesses saw a little more sunshine in February says Ted Mallet chief economist and vice president for CFIB Better conditions in Ontario and the Maritimes that were once held back by European and U S economic worries appear to be driving the gains in sentiment Businesses in Western Canada are generally the most optimistic with Alberta 72 3 and Saskatchewan 70 1 again at the top of the list However February also saw meaningful gains in optimism in New Brunswick Nova Scotia and Ontario Unfortunately British Columbia s confidence fell last month and PEI and Newfoundland Labrador are following the same direction Optimism weakened in construction and manufacturing but it was more than offset by big improvements in retail and hospitality suggesting that consumers are in a positive frame of mind March 5 2012 Entrepreneurial Brand Fails To Resonate Canada s national entrepreneurial brand may not be resonating as well as it could says an Ernst Young report Canada in a globalized economy an investment perspective shows very few international executives from high growth companies see Canada as offering a strong entrepreneurial culture beyond the startup phase And only one third said Canada has superior market growth prospects That s a real gap that must be addressed says Colleen McMorrow national and Ontario director of its Entrepreneur Of The Year Awards in Canada Big or small private or public entrepreneurial companies are a key cornerstone for our economy Our community must help entrepreneurs achieve their potential and create a brand that shines here and attracts critical investment dollars to Canada Canada s entrepreneurs contribute to more than the bottom line They are also powerful agents of change who create the products methods markets and solutions that drive the economy forward To recognize game changing entrepreneurs Ernst Young has launched the 19th season of its entrepreneur of the year awards It is calling on Canadians to nominate outstanding local entrepreneurs from across the country The deadline for applications is April 30 Nominee must be owners CEOs or CEO equivalents of a private or public company with primary responsibility for its recent performance and an active member of top management The company must be at least three years old Advisors Key Influence Advisors are the key influence on investors decision making say a study by Investor Education Fund Investor Behaviour and Beliefs Advisor Relationships and Investor Decision Making provides insight into the learning needs of Canadian investors who have an advisory relationship including factors that influence investment decisions how people work with advisors to make decisions and investor expectations of their advisors The study found that Canadian investors most commonly look to their advisors for advice on asset mix planning and specific types of investments to buy It found that investors trust in their advisors opinions dominates all other factors in the decision to buy investments Weather Factor In Relocating Over the next several years the first of Canada s nine million baby boomers will find themselves deciding whether to stay in their homes transition to a smaller place of residence or relocate to another city or country And says a report from the BMO Retirement Institute among the top factors that boomers stated as reasons to relocate upon retirement are weather 57 per cent financial reasons 54 per cent proximity to family and friends 45 per cent and better access to healthcare support services 35 per cent Although downsizing may seem like a straightforward move there are several factors to consider before making the decision Even if downsizing may be years away it s important not only to think about all of the factors that can affect your decision but to maintain an open dialogue with your loved ones says Dr Amy D Aprix BMO life transition expert Being proactive will help you remain in control rather than having to deal with an unexpected move when you re not prepared Arrow Offers Garrison Hill Fund Garrison Hill Capital Management Inc a Canadian based global macro investment management firm has entered into an arrangement with Arrow Capital Management Inc which will result in a closer partnership between the two firms Arrow Capital is already a direct investor in the Garrison Hill Macro Opportunities LP through its Arrow Maple Leaf Fund It will now be making the fund strategy available directly to investors through its Global Manager Series Solutions as the Garrison Hill Fund In addition Arrow Capital has acquired the right to become a significant minority shareholder in Garrison Hill and will be providing it with additional operational compliance and risk management support in order to further strengthen the offering to investors Features More Important Than Brand Seventy eight per cent of Canadians feel getting the features they want in a product is more important than the brand they buy says Hyundai Canada s Consumer Gauge It shows that in light of the global economic changes over the past five years consumer confidence has shifted and traditional luxury is now low in the list In fact one in four Canadians admit their definition of luxury has changed since the 2008 global financial crisis The study goes on to reveal that 66 per cent of Canadians prefer to buy modern brands that combine luxury at a fair price and more than 50 per cent of Canadians have no intentions of buying a luxury item in the next 12 months Price was found to be the most influential determinant of luxury across all groups followed by personal gain enjoyment impact on lifestyle and exclusivity Men are more likely to purchase luxury products that are functional and tangible such as cars and appliances while women are more likely to spend on luxury products that are aesthetically pleasing However they are most likely to seek high value in their purchases and shop around for the best price Cuban Cigar Sales Jump Cuban cigar sales jumped nine per cent to 401 million in 2011 as spending on luxury items increased in countries with stronger economies says Habanos SA the worldwide distributor of Cuban cigars Smokers in China the Middle East Russia and Brazil helped overcome declining sales in economically troubled Spain and Greece However Spain held on to its position as the top consumer of what are generally considered the world s best cigars Western Europe is its biggest market accounting for 53 per cent of sales last year followed in descending order by the Americas minus the United States the Asia Pacific region the Middle East and Africa and eastern Europe Due to the 50 year long U S trade embargo against Cuba Cuban cigars cannot be sold legally in the United States the world s largest cigar market Global Markets Look For Signs Global markets are looking for signs that conditions are improving and any sliver of good news no matter how small is driving gains in the market says a report from CIBC World Markets Inc These are not normal times says Benjamin Tal its deputy chief economist In normal times investors overreact to bad news more than they react to good news In today s environment good news has the upper hand Investors are highly responsive to positive data surprises while negative news is often ignored or creatively interpreted as good news Despite the negative surprises that dominated the news during the past three months the Canadian market has managed to grow by nine per cent as investors seemingly ignored Canadian data and paid more attention to positive factors in the U S and international economies In the U S the 12 per cent rally in the S P 500 since mid December is largely attributed to the better than expected economic data during that period But on average the market has also reacted positively to negative data surprises Tal expects Canadian investors will continue to focus on U S economic data and largely ignore further negative news from Canada s manufacturing sector where the drag of the strong dollar is still clearly evident Investor Confidence Slips The State Street Investor Confidence Index ICI fell to 86 5 down 6 1 points from January s revised level of 92 6 The decline was most pronounced among North American investors whose confidence fell 9 5 points to 80 5 its lowest reading in more than three years The outlook of European investors by contrast improved with the ICI rising four points from January s revised reading of 91 2 to reach 95 2 In Asia investor sentiment stayed relatively static ticking down 0 3 points from a revised January reading of 96 6 to end at 96 3 This month institutional investors in the aggregate continued the pattern established late in 2011 of reducing allocations to equities says Kenneth Froot the Harvard University professor who helped develop the index Given that equity returns have been positive over the last one and three months it is clear that these institutions have been liquidity providers in the market comfortable with rebalancing their portfolios at these higher valuations At the same time we do note a pro cyclical bias to the reallocation Institutions are keen to hang on to or even increase their holdings of pro growth sectors such as industrial and consumer discretionary stocks while cutting back on consumer staples healthcare and telecom stocks Issues Have Not Gone Away The issues we have been concerned about for years have not gone away and are unlikely to anytime soon says Brett Gallagher deputy chief investment officer at Artio Global Management LLC In the first Artio CIO Letter of 2012 he says problems in Japan are now more than 20 years old and counting Rolling bubbles and economic woes in the U S are entering their 13th year and Europe begins at least its fifth year of troubles with no end in sight As a result the markets are likely to move between periods of hope and disappointment We expect risk on risk off and beta trades to remain a feature of stock bond and commodities markets he says As well growth will remain low in the developed world While the emerging world should do better its markets will likely suffer the similar ebb and flow of hope and disappointment He does not expect authorities to stand idly by even if many of their efforts are ineffectual their ample provisions of liquidity should overall be positive for risk assets if not their economies AGF Acuity Amalgamate AGF Management Limited has amalgamated a subsidiary Acuity Funds Ltd This amalgamation reflects the next phase of the acquisition of Acuity which occurred in February 2011 The continuing amalgamated entity to be known as AGF Investments Inc continues as the manager of the entire family of AGF and Acuity funds Acuity Investment Management Inc continues as the investment manager on its respective mandates and will continue to employ the philosophy and processes on which it has built its track records February 27 2012 M A Key Growth Strategy Mergers and acquisitions are a key growth strategy for Canadian CEOs says PwC s 15th Annual Global CEO Survey Canadian CEOs are more bullish than their G7 and U S counterparts with 25 per cent planning a merger or acquisition compared to the global average of 12 per cent They also indicated a stronger appetite for joint ventures and or strategic alliances than their G7 peers It also found 73 per cent are confident in their ability to finance growth while 45 per cent wish they could spend more time developing operations outside their home markets However concern about the macro economic environment is palpable with only 13 per cent of Canadian CEOs expressing optimism on global prospects Website Helps With Posh Picnics With spring is right around the corner people everywhere are dreaming about getting back outside and enjoying the beautiful weather One popular way to do just that is by hosting a picnic and Outdoor Posh is a website that has been getting a lot of

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    the U S dollar Japanese Yen British Pound Sterling and the Euro are all in crisis and it is hard to decide which one is worse Because the big four are so unattractive the Canadian dollar is attractive as a global reserve currency However the attractiveness of the Canadian dollar is limited by the central bank s inability to raise interest rates and its large current account deficit For investors who want to hedge they should avoid the Euro and the Pound among the big four Or they can switch to small country currencies and take a market neutral approach using a basket of these currencies February 6 2012 Beliefs About Innovation Inaccurate Canada s weak innovation performance is partly a result of Canadian business leaders sometimes inaccurate beliefs about the innovation environment says a Conference Board of Canada report based on results from the World Economic Forum s Global Competitiveness Survey 2011 12 Canadian business leaders may be less inclined than their global counterparts to adopt innovation as a business strategy because they do not see it as rational or necessary in their current environment says Daniel Munro principal research associate Many Canadian business leaders feel that competitive pressures are not strong enough to motivate innovation capital markets are too weak and the tax burden is too high But their perceptions do not always align with reality The report From Perception to Performance How Canadian Business Leaders View the Innovation Environment shows Canada ranks 11 th among the 142 countries ranked on innovation in the WEF s report trailing key competitors such as Japan the United States and Germany as well as small advanced economies such as Switzerland Sweden and Finland Perceptions of high taxation less intense competition and weak capital markets help to explain why Canadian firms are less likely to innovate than global peers Advisors Bullish On Equity Markets After reasonably strong equity returns during the last quarter of 2011 the majority of Canadian investment advisors believe equity markets should increase again during the first quarter of 2012 says Horizons Exchange Traded Funds Inc s Q1 Advisor Sentiment Survey Roughly two out of three Canadian advisors 60 per cent were bullish on Canadian equities as represented by the S P TSX 60 Total Return Index after this index posted a positive 2 07 per cent return on the quarter Similarly bullish sentiment increased more than seven percentage points from the previous advisor survey on U S large cap equities as represented by the S P 500 to 58 per cent after an 11 per cent gain on that index last quarter Fisker Comes To Canada The Fisker Karma the world s first true Electric Vehicle with extended range is coming to Canada As its initial entrée into the Canadian market Fisker Automotive has partnered with established retailers to bring its uncompromised responsible luxury cars to locations in Toronto ON Calgary AB and Vancouver BC Fisker an American car company was founded in 2007 The company is designing and developing the world s first line of premium electric plug in hybrid luxury autos for the modern sports car buyer Senior Management Involved In Benefits Decisions As the benefits decision making process continues to gain importance in corporate America there is growing trend of senior management boards of directors and finance treasury as well as human resources increasingly becoming involved in or making these decisions says A Changing Benefits Landscape the third in a series of research briefs from Prudential s Sixth Annual Study of Employee Benefits Today Beyond It found that 40 per cent of plan sponsors say the employee benefits decision making process in their company has changed to some extent over the past five years demonstrating increased attention to the bottom line impact of benefits The influence of senior management has increased the most with 45 per cent of respondents saying they are more involved in these decisions More than 20 per cent of plan sponsors indicated that the boards of directors finance treasury and employees themselves are all playing a more important role in the benefits decision making process Denison Warns About Protectionist Measures The head of the Canada Pension Plan Investment Board CPPIB is calling for policymakers to carefully consider the implications of protectionist measures on capital flows In a speech to the Canadian Australian Chamber of Commerce David Denison president and chief executive officer said at a time when the world arguably most needs to accelerate trade capital flows and economic activity to stimulate growth we see growing signs that economic nationalism and protectionism continue to influence outcomes Instead our overarching belief is that there needs to be a large and strong presence of long term investors for capital markets to function well and economies to flourish The various roles played by long term investors including how they help stabilize markets in times of stress provide patient capital and support for companies to pursue long term value creation helps offset the predominant quarter by quarter mindset Citing the shrinking universe of long horizon investors he encouraged policy makers to consider carefully the implications of policy frameworks and rule changes on the availability of true long term capital Equity Managers End Year Positively The year ended on a positive note for large cap Canadian equity investment managers with 76 per cent outperforming the S P TSX Composite Index s return in the fourth quarter of 2011 the highest outperformance since the second quarter of 2004 says the Russell Active Manager Report That compares to only 40 per cent who beat the benchmark in the third quarter The median large cap manager return was 4 7 per cent in the fourth quarter compared to the S P TSX Composite s return of 3 6 per cent the largest outperformance in three years The focus came back to fundamentals with many of the companies that were beat up in the third quarter rebounding strongly in the fourth primarily in the month of October says Kathleen Wylie senior research analyst The market seemed to recognize that good companies with good management trading at reasonable valuations should be rewarded HSBC Identifies Opportunities Investment grade and emerging corporate bonds and emerging markets sovereign debt are providing among the most attractive investment opportunities says HSBC Global Asset Management s Investment Quarterly Report The report shows that other themes where valuations are considered to be attractive include selective commodities hard and soft via outright exposure or to stocks in the sector and exposure to emerging consumption and infrastructure themes via both emerging and developed market stocks Philip Poole global head of macro and investment strategy says We currently favour the so called cyclical sectors in emerging markets namely industrials materials financials and energy as central banks in countries including China Brazil Indonesia and Thailand have cut interest rates or reserve ratios to stimulate growth as concern about inflation recedes And many such countries still have the scope to ease further and to fund development projects with bond sales In many Western countries rates are already near zero and public debt is significant RBC Brings Funds To Canada RBC Global Asset Management Inc has made the BlueBay Emerging Markets Corporate Bond Fund RBC U S Mid Cap Value Equity Fund and RBC U S Small Cap Core Equity Fund available for purchase by individual and institutional investors in Canada BlueBay Emerging Markets Corporate Bond Fund invests primarily in debt securities of corporations based in emerging market countries The fund is appropriate for investors seeking a combination of income and capital growth potential while looking to diversify the fixed income portion of their portfolios through exposure to emerging market debt securities The RBC U S Mid Cap Value Equity and U S Small Cap Core Equity Funds invest primarily in equity securities of U S mid cap and small cap companies that are deemed to be undervalued in order to provide broad exposure to economic growth opportunities in the equity markets Business Optimism Improves Optimism among Canadian small and mid size businesses continues to improve but at a reserved pace says the Canadian Federation of Independent Business CFIB Its Business Barometer Index ended January at 65 2 just slightly above the 65 registered in December but not enough to register as a statistically significant movement The East West divide on economic performance continues Alberta businesses lead the way as Canada s most optimistic with an index level at a very healthy 73 3 In fact all four Western provinces are well above the national average Ontario and Quebec businesses slide in just below average while the Atlantic region remains least optimistic U S Economy Expected To Grow The U S economy is expected to grow by 2 7 per cent in 2012 but even this modest gain depends on whether governments on both sides of the Atlantic Ocean deal with their respective debt challenges says the Conference Board of Canada s U S Outlook Winter 2012 The outlook assumes that even if Europe enters a recession its governments will find a way to keep the euro currency from collapsing The forecast also includes the assumption that the United States adopts fiscal policies that support continued growth in the economy Lower payroll taxes and maintenance of unemployment insurance benefits are two measures that would stimulate the economy in the short term However Congress and the Obama Administration must reach an agreement on these measures otherwise the effects of tighter fiscal policy will reduce economic growth this year Business Confidence On Knife Edge Global business confidence is balancing on a knife edge heading into 2012 says a report from Grant Thornton International The fourth quarter results of the International Business Report IBR shows the global economic outlook is still dominated by the crisis in the eurozone and fears are increasing that business growth will become even more difficult than in 2011 Global business optimism in the fourth quarter of 2011 stands at net zero per cent indicating a balance between those business leaders feeling optimistic about their economies in 2012 and those feeling pessimistic It represents a further deterioration from three per cent in the third quarter of 2011 and 31 per cent in the second quarter Canada which stood out in the third quarter by posting net business optimism of 60 per cent saw this fall to 46 per cent in the fourth quarter Though not immune from the global slowdown Canada is still significantly above the global average and alongside Germany is the most optimistic mature economy January 30 2012 CEOs See Global Decline Nearly half 48 per cent of the CEOs polled worldwide believe the global economy will decline even further in the next 12 months says PwC s 15th Annual Global CEO Survey Just 15 per cent said the global economy will improve during 2012 The outlook was almost identical for the 130 Canadian CEOs who responded to this year s survey with 48 per cent seeing a decline over the next year and only 13 per cent believing the market will improve However Canadian CEOs believe their organizations have been less affected by global turmoil than leaders in other countries For instance while the sovereign debt crisis was cited as the key global issue to affect Canadian businesses a reduced number of Canadian CEOs 38 per cent said the crisis had an impact on their operations this year compared to 56 per cent of CEOs globally Similarly this held true for other significant global events including the Japan earthquake and nuclear crisis 18 per cent compared to 29 per cent globally and the political upheaval in Arab economies 14 per cent compared to 21 per cent globally In general CEOs in Canada believe their companies have greater resilience and growth prospects than their global peers says Gino Scapillati national managing partner markets Compared to other leaders Canadian CEOs found their companies to be less affected financially by major 2011 crises events CN Suspend Ex CEO s Pension Canadian National Railway Co has suspended Hunter Harrison s pension payments alleging that its former chief executive officer will breach provisions of his retirement deal and poses a serious threat to CN if he joins rival Canadian Pacific Railway Ltd says a report in the Globe and Mail Harrison is in the midst of a proxy battle by U S hedge fund Pershing Square Capital Management LP on CP which is lagging behind other freight carriers in the industry It wants to replace current CEO Fred Green with Harrison Now CP s largest shareholder it hired Harrison as a consultant last fall to help the hedge fund assess its potential investment in CP The report says Pershing Square is prepared to guarantee Harrison s retirement benefits if CN prevails with its suit Harrison had a non compete clause that expired at the end of 2011 His pension benefits have a present value of 20 6 million and restricted share units worth 17 9 million Special Rolls Sells Out In China Luxury car sales in China show no signs of slowing In fact a special edition Rolls Royce Phantom built to commemorate the Chinese New Year sold out within two months of being announced even though it was priced from 1 2 million Torsten Mueller Oetvoes Rolls Royce CEO Chinese customers aren t satisfied with plain old luxury cars but prefer highly bespoke models Already some 56 per cent of orders for the entry level Ghost sedan contain some element of bespoke personalization ranging from custom paint through picnic sets and cigar humidors The automaker plans to build even more dealerships in China on top of the existing 14 it has just to keep up with demand Investors Suffer From Fatigue The Canadian stock market has become narrower with more exposure to resource and financials says Jeff Tory a partner at Pembroke Management Ltd Speaking at its Outlook 2012 he said this is compounded by the fact that Canadian investors are too focused on Canada Heading into 2012 he also said that investors being bombarded by negative news and experiencing a loss of faith in government This has left them suffering from fatigue and feeling no love for equities The end result is inaction as they are uncertain about what to do Monetary Policy Needs Watchdog Canada should improve its oversight of financial stability in the economy with a watchdog committee co chaired by the Bank of Canada and Finance Canada says a report by the C D Howe Institute Financial Stability The Next Frontier for Canadian Monetary Policy says the next goal of monetary policy in Canada as elsewhere is to achieve and maintain financial stability in the economy A new Canadian institutional framework to oversee financial market regulation with an eye to enhancing financial stability would take a systemic approach to safeguarding the financial system as a whole and clearly define the role of the Bank of Canada within it It says while Canada weathered the recent financial crisis well a better system could improve the odds of forestalling the next one North American Investors Optimistic North American investors are feeling optimistic say Investor Sentiment Index ISI surveys from Manulife Financial and John Hancock In the first ever comparison of the two surveys results suggest that Canadians are nearly twice as likely to view the present as a good or very good time to be investing in a range of investment vehicles as are their American counterparts The Canadian index rose five points and hit a year end high of 26 while the American index also increased five points ending the year at 15 Growing consumer confidence is an important barometer when looking at the future health of the economy on either side of the border says Bill Cheney chief economist for the companies Consumer confidence usually translates into increased spending a critical component to keep their economies moving forward ETF Servicing Capability Enhanced State Street Corporation has expanded its global servicing capability for exchange traded funds ETFs Now leveraging state of the art cloud enabled technology its ETF servicing solution TotalETFSM drives full automation throughout the lifecycle of an ETF from the basket creation process to trade processing and settlement The enhancements provide complete integration to core applications end to end automation and full client transparency via an ETF dashboard available on the company s client website Additional functionality includes the geographic expansion of its Fund Connect ETF order management system and a daily performance attribution capability RBC Commits To Impact Investing The Royal Bank of Canada will commit 10 million to impact investing The RBC Impact Fund will help finance projects by organizations and entrepreneurs that address social and environmental challenges And it s also making a 10 million investment by the RBC Foundation of its own assets into socially responsible investment funds The bank will assemble an advisory panel to assist an internal group in developing criteria for the fund including types of organizations eligible for funding terms of funding geographical limitations etc an appropriate governance structure and processes Details on the eligibility criteria and application process for the fund will be communicated in the coming months Effort Needed To Educate ETF Investors The exchange traded fund ETF industry needs to be responsible in developing new products and make greater efforts to educate investors about ETFs says Gus Sauter CIO at Vanguard In a speech at the IndexUniverse Inside ETFs conference he said the ETF industry has been characterized by growth and innovation From 2000 to 2010 assets in ETFs grew by about 30 per cent per year The rapid growth of ETFs has been largely good news for investors providing them with greater access to diversified low cost index funds and giving advisors simple flexible investment tools for building well constructed portfolios for their clients However he encouraged ETF providers and investment advisors to play the role of an educator when it comes to ETFs I believe that as providers of ETFs and as distributors of ETFs we

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    AGA Range Comes To Canada AGA Marvel has brought the AGA Total Control Range Cooker to Canada The range has been redefined with state of the art touch screen controls giving ultimate programmability while retaining the classic design value that have made it a kitchen icon in the UK With two hotplates and three large cast iron ovens preset at the correct temperature for roasting baking and simmering it can cook food in 10 different ways from grilling and toasting to roasting It is expected to be available in March In the UK the price of the range starts at around 15 000 Businesses Pessimistic About Future Canadian businesses are becoming more pessimistic about the economy and their future prospects for sales both at home and in foreign markets says the Bank of Canada The central bank s survey of senior management at 100 representative firms shows confidence is well off post recession highs across the broad spectrum of issues from sales expectations to their ability to pass through their costs to customers But executives are most gloomy about sales For the first time in almost three years more firms on balance expect sales growth to slow rather than increase over the next 12 months In the survey 41 per cent expect their sales pace to slow as opposed to 37 per cent that expect an increase January 9 2012 Top CEOs Make Average Worker s Salary In Three Hours The richest Canadians are now making 189 times the country s average wage says a report by the Canadian Centre for Policy Alternatives The 100 highest paid chief executives at companies are listed on the S P TSX composite index made an average of 8 38 million in 2010 compared with the 44 366 an average Canadian made working full time The Canada s CEO Elite 100 report says this is a 27 per cent increase from the 6 6 million average compensation for the top 100 CEOs in 2009 It means that by noon on a regular working day the average top executive will have already made as much money as the average Canadian worker makes in a year Pay Gaps Make Attracting Talent Difficult Significant pay gaps for executive positions in the United States and Canada may make it more difficult for Canadian companies to attract American talent says Meridian Compensation Partners A study from the firm compared the outside director compensation practices at the S P TSX 60 index companies and at U S public companies with comparable revenue It found U S companies pay their directors median total compensation of US 207 625 22 per cent more than Canadian companies where median total compensation is 170 795 The gap is narrower for cross listed Canadian companies with U S companies paying only 13 per cent more total compensation at the median U S companies pay a greater portion of total compensation 57 per cent in equity compared with 39 per cent in equity at Canadian companies

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