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  • Private Wealth Canada News
    of its retail funds Series EF securities are only available through the Sun Life Global Investments Private Client program to investors who have a fee based account with their dealer and whose dealer has signed an agreement with Sun Life Global Investments Instead of paying sales charges investors buying Series EF securities pay fees to their dealer for investment advice and other services Fixed Income Flow Largest ETFs and ETPs listed in Canada gathered US 7 billion in net new assets up to the end of July At that time the Canadian ETF industry had 368 ETFs with 524 listings assets of US 66 billion from 11 providers listed on one exchange says ETFGI s preliminary ETF and ETP global insights report for July 2015 In July ETFs ETPs listed in Canada saw net inflows of US 400 million Fixed income ETFs ETPs gathered the largest net inflows with US 130 million followed by equity ETFs ETPs with US 54 million and commodity ETFs ETPs with US 40 million The S P 500 index ended up two per cent for the month of July and finished the first seven months of 2015 up three per cent Although investors faced uncertainty in China and Greece during July they continued to invest significant net new assets in equity ETFs says Deborah Fuhr managing partner of ETFGI Luxury Vehicles Sales Soar Sales of BMW MINI and Rolls Royce brand vehicles totalled 173 195 in July a new high for the month and an increase of 5 6 per cent compared with the same period last year A record was also achieved for the first seven months of the year with a total of 1 272 953 vehicles delivered to customers an increase of 7 5 per cent In July BMW brand deliveries increased by 5 8 per cent sales for the year to date climbed 5 2 per cent to 1 079 563 units A total of 25 416 MINIs were delivered to customers around the world in July an increase of 4 8 per cent Year to date sales climbed 22 5 per cent to total 191 355 units Sales of the three door MINI grew by 24 per cent in the first seven months of the year 73 226 while the new five door MINI was delivered to 51 666 customers worldwide in the same period In line with its strategy of balanced global sales deliveries of BMW Group vehicles rose in all regions In Asia deliveries of BMW and MINI vehicles in the year to date increased 4 1 per cent Sales in Mainland China for the first seven months of the year are slightly up on last years already extremely high level increasing a further 1 3 per cent Meanwhile deliveries in Japan climbed 11 7 per cent in the year to date with sales in South Korea for the same period also seeing a double digit increase up 22 2 per cent Solid sales growth continues in the Americas where a total of 281 432 BMW and MINI vehicles have been delivered to customers so far this year an increase of 8 4 per cent In the U S sales in the first seven months of 2015 rose 8 1 per cent while sales in Canada over the same period rose 13 4 per cent Returns Negative For Median Manager The median large cap investment manager in Canada returned 1 4 per cent for the second quarter of 2015 outperforming the S P TSX Composite which fell 1 6 per cent for the period In addition nearly two thirds 62 per cent beat the index for the second quarter increasing from 53 per cent in the first quarter says the Russell Investments Canada Active Manager Report No one likes to lose money says Kathleen Wylie head of Canadian equity research at Russell Investments Canada Despite a negative return for the quarter not losing as much as the index does help a manager s long term performance relative to the benchmark Over the past five years the median manager outperformed the benchmark by more than 45 basis points on average per quarter while managers in the top quartile averaged roughly 165 basis points ahead of the benchmark Among the full universe of money managers surveyed an average of 59 per cent beat the benchmark for the five year period PE VC Finish With Positive Returns U S private equity PE and venture capital VC funds finished the final quarter of 2014 with positive returns though in the case of PE just barely due primarily to poorly performing investments in energy companies says Cambridge Associates VC investments did significantly better for the period beating out not only PE funds but public equities as well While neither private asset class matched its annual performance in 2013 both posted double digit returns for 2014 Its US Private Equity Index rose 0 8 per cent and 11 2 per cent for the quarter and year ending December 31 2014 The U S Venture Capital Index increased 9 9 per cent and 21 5 per cent respectively over the same periods For comparison for the quarter and year the S P 500 returned 4 9 per cent and 13 7 per cent The annual returns of both benchmarks were helped by the strong performances of companies in several large sectors especially healthcare in the PE index and software in the VC index Allocations To Global Real Estate Will Expand Cross border and domestic capital will continue to expand its allocation to global real estate as a result of the benign economic environment says LaSalle Investment Management s Mid Year 2015 Investment Strategy Annual ISA With interest rates remaining lower for longer benchmark bond and real estate debt costs remaining low and a steady cyclical recovery underway around the world real estate values continue to prove attractive The secular themes of demographics technology and urbanization also continue to drive demand for space in specific areas

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-08-30 (2016-04-26)
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  • Private Wealth Canada News
    billion from 11 providers listed on one exchange In the first half of 2015 record levels of net new assets were gathered with US 152 billion beating the prior record of US 130 billion in the first half of 2014 ETFs ETPs listed in Canada gathered net inflows of US 984 million and U S listed ETFs ETPs gathered US 103 billion beating the previous record of US 76 billion gathered in the first half of 2012 Market Volatility Increase Predicted Sixty three per cent of professional U S investors foresee an increase in market volatility in the next 12 months says the MFS Active Management Sentiment survey Seventy per cent say protecting capital in down markets is one of the most important considerations when selecting an active manager and 63 per cent say actively managed strategies work best in a falling market Evidence bears this out it says as over the past 25 years the top quartile of active managers have achieved an average of 7 6 per cent in excess returns in bear markets Despite significant flows to passive strategies since the financial crisis of 2008 only 38 per cent of professional investors are highly confident in passive management When selecting an active manager risk management is the most important trait followed by active security Hedge Funds Show Positive Returns Hedge fund returns ended the first half of the year positively with the HFRI Fund Weighted Composite index returning 2 4 per cent in the six months ended June 30 The index s six month return calculated by Hedge Fund Research topped the 1 2 per cent return of the S P 500 index and the 0 1 per cent return of the Barclays U S Aggregate Bond index but trailed the MSCI World ex U S index return of 4 8 per cent as well as the 3 1 per cent return of the MSCI Emerging Markets index On a quarterly basis the hedge fund index returned 2 1 per cent in the three months ended March 31 and 0 2 per cent in the three month period ended June 30 July 13 2015 Top Earners Pay Outpaces Rest The dramatic rise in pay of Canadians in the top one per cent of earners has far outpaced that of all other income earners over the past three decades Executives working in the finance and business services sectors have been driving the growth in top incomes but their gains are not clearly tied to talent or performance says a study from the IRPP The study shows an overwhelming majority of top income earners are men over the age of 35 who tend to work substantially longer hours than average usually in senior management positions In 2011 the income cut off for the top one per cent was 160 000 and the average annual income was 320 000 in 2000 dollars The oil and gas sector also played an important role in income growth at the top especially in more recent years As a result a disproportionate share of top income earners 21 per cent now live in Alberta The study suggests in the case of the financial sector deregulation and lack of oversight have created opportunities for professionals to earn extraordinarily high incomes Similarly the fact that the pay of CEOs has increased substantially is a function of corporate governance structures that allow executives to collect stock options and other supplementary benefits Canadians Not Discussing Transfer Of Wealth Half of Canadians expect to leave assets upon their death However when it comes to having conversations about transferring their wealth many say they have not discussed it with their family or a financial advisor says a survey by CIBC The survey shows that 79 per cent of Canadians have not discussed the financial and tax implications of an inheritance with a financial advisor either Without the right amount of communication Canadians run the risk of the next generation not being prepared to manage their inheritance says Sarah Widmeyer managing director and head of wealth advisory services at CIBC To help bridge the gap families need to become comfortable having conversations about wealth transfer There is a clear disconnect between generations when it comes to wealth transfer and this can have a lasting impact on family legacies Without open honest communication family s risk significant conflict especially when parents wishes don t align with their children s she says Some key areas where there may be conflict include the transfer of the family cottage inheritances charitable gifting and probate Business Travellers Overspending On Wi Fi International business travellers from North America and Europe are overspending by at least 1 33 billion on connectivity charges when traveling each year says the Business Traveler Connectivity Cost Index by Rethink Technology Research In 2014 business travelers from North America and Europe made 78 million international business trips and the direct and indirect costs of keeping these business travelers online through cellular roaming pay on demand Wi Fi and free Wi Fi would have been at least 2 22 billion for all trips In contrast providing business travelers with access to an unlimited global Wi Fi network would realize savings of at least 1 33 billion Failing to have a practical and convenient policy for mobile connectivity can be a costly mistake for businesses says Gary Griffiths iPass president and CEO The amount of mobile data consumed by business is growing rapidly as more employees adopt the use of cloud based mobile applications of all kinds and look to replicate enterprise working environments on their smart phones tablets and laptops Although there are millions of free and pay on demand Wi Fi hotspots connecting to them often poses multiple annoyances from having to enter personal and credit card information repeatedly to the threat of exposing sensitive business and personal information on unsecured networks Providing unlimited access to global mobile network of wireless hotspots solves this problem GTA Leads In Luxury Home Sales Building on

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-07-30 (2016-04-26)
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  • Private Wealth Canada News
    billion from 11 providers listed on one exchange In the first half of 2015 record levels of net new assets were gathered with US 152 billion beating the prior record of US 130 billion in the first half of 2014 ETFs ETPs listed in Canada gathered net inflows of US 984 million and U S listed ETFs ETPs gathered US 103 billion beating the previous record of US 76 billion gathered in the first half of 2012 Market Volatility Increase Predicted Sixty three per cent of professional U S investors foresee an increase in market volatility in the next 12 months says the MFS Active Management Sentiment survey Seventy per cent say protecting capital in down markets is one of the most important considerations when selecting an active manager and 63 per cent say actively managed strategies work best in a falling market Evidence bears this out it says as over the past 25 years the top quartile of active managers have achieved an average of 7 6 per cent in excess returns in bear markets Despite significant flows to passive strategies since the financial crisis of 2008 only 38 per cent of professional investors are highly confident in passive management When selecting an active manager risk management is the most important trait followed by active security Hedge Funds Show Positive Returns Hedge fund returns ended the first half of the year positively with the HFRI Fund Weighted Composite index returning 2 4 per cent in the six months ended June 30 The index s six month return calculated by Hedge Fund Research topped the 1 2 per cent return of the S P 500 index and the 0 1 per cent return of the Barclays U S Aggregate Bond index but trailed the MSCI World ex U S index return of 4 8 per cent as well as the 3 1 per cent return of the MSCI Emerging Markets index On a quarterly basis the hedge fund index returned 2 1 per cent in the three months ended March 31 and 0 2 per cent in the three month period ended June 30 July 13 2015 Top Earners Pay Outpaces Rest The dramatic rise in pay of Canadians in the top one per cent of earners has far outpaced that of all other income earners over the past three decades Executives working in the finance and business services sectors have been driving the growth in top incomes but their gains are not clearly tied to talent or performance says a study from the IRPP The study shows an overwhelming majority of top income earners are men over the age of 35 who tend to work substantially longer hours than average usually in senior management positions In 2011 the income cut off for the top one per cent was 160 000 and the average annual income was 320 000 in 2000 dollars The oil and gas sector also played an important role in income growth at the top especially in more recent years As a result a disproportionate share of top income earners 21 per cent now live in Alberta The study suggests in the case of the financial sector deregulation and lack of oversight have created opportunities for professionals to earn extraordinarily high incomes Similarly the fact that the pay of CEOs has increased substantially is a function of corporate governance structures that allow executives to collect stock options and other supplementary benefits Canadians Not Discussing Transfer Of Wealth Half of Canadians expect to leave assets upon their death However when it comes to having conversations about transferring their wealth many say they have not discussed it with their family or a financial advisor says a survey by CIBC The survey shows that 79 per cent of Canadians have not discussed the financial and tax implications of an inheritance with a financial advisor either Without the right amount of communication Canadians run the risk of the next generation not being prepared to manage their inheritance says Sarah Widmeyer managing director and head of wealth advisory services at CIBC To help bridge the gap families need to become comfortable having conversations about wealth transfer There is a clear disconnect between generations when it comes to wealth transfer and this can have a lasting impact on family legacies Without open honest communication family s risk significant conflict especially when parents wishes don t align with their children s she says Some key areas where there may be conflict include the transfer of the family cottage inheritances charitable gifting and probate Business Travellers Overspending On Wi Fi International business travellers from North America and Europe are overspending by at least 1 33 billion on connectivity charges when traveling each year says the Business Traveler Connectivity Cost Index by Rethink Technology Research In 2014 business travelers from North America and Europe made 78 million international business trips and the direct and indirect costs of keeping these business travelers online through cellular roaming pay on demand Wi Fi and free Wi Fi would have been at least 2 22 billion for all trips In contrast providing business travelers with access to an unlimited global Wi Fi network would realize savings of at least 1 33 billion Failing to have a practical and convenient policy for mobile connectivity can be a costly mistake for businesses says Gary Griffiths iPass president and CEO The amount of mobile data consumed by business is growing rapidly as more employees adopt the use of cloud based mobile applications of all kinds and look to replicate enterprise working environments on their smart phones tablets and laptops Although there are millions of free and pay on demand Wi Fi hotspots connecting to them often poses multiple annoyances from having to enter personal and credit card information repeatedly to the threat of exposing sensitive business and personal information on unsecured networks Providing unlimited access to global mobile network of wireless hotspots solves this problem GTA Leads In Luxury Home Sales Building on

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-07-31 (2016-04-26)
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  • Private Wealth Canada News
    real estate business ownership and collectible and consumer goods Global Conditions Driving Up Costs Of Expatriate Packages Currency fluctuations driven by economic and political unrest are contributing to the cost of expatriate packages says Mercer in its 21st annual Cost of Living Survey The survey finds that factors including instability of housing markets and inflation for goods and services impacts significantly the overall cost of doing business in a global environment Sending employees abroad is necessary to compete in markets and for critical talent and employers need a reliable and accurate reflection of the cost to their bottom line says Ilya Bonic senior partner and president of Mercer s talent business This year Asian and European cities particularly Hong Kong Zurich Singapore and Geneva top the list of most expensive cities for expatriates The costliest city for the third consecutive year is Luanda the capital of Angola Bonic says Aligning workforce and mobility strategies by ensuring the right employees are in the right places is more critical than ever to manage globalization And properly compensating employees on international assignments is as important as it is costly More High Earners Shopping Online Brick and mortar stores remain the dominant selling channel for two thirds of high income customers those who earn at least 150 000 per year says a survey by the Luxury Institute However the survey shows that eCommerce is gaining momentum The tendency to make a greater share of purchases in stores increases with age while the preference for buying online is strongest among younger luxury consumers Wealthy women 45 and younger are the demographic group with the lowest share 59 per cent of spending taking place in stores and the highest 41 per cent percentage of luxury spending occurring online Men 65 and older have the greatest share 71 per cent of instore spending Wealthy shoppers cite convenience better prices and wider product selection as reasons they buy online Top reasons for shopping instore are seeing touching feeling and trying on products Many women also mention assessing quality as a reason for going into a store to shop and buy luxury goods Men who purchase online are more likely than women to indicate that they are doing more of their shopping in any given category online than they used to Among online shoppers men are more likely than women to report that they have increased their online shopping in the past 12 months The Luxury Institute says that store traffic is down across the luxury industry due in part to the success of online and mobile platforms but also because luxury brands are falling short in efforts to give wealthy shoppers a reason to shop there Physical stores remain essential in maintaining a brand s visibility while also ringing up a vast majority of sales and smart brands are finding complementary ways to combine brick and mortar stores with new technologies to achieve outstanding results More Canadians Seeking Professional Advice New research finds a rise in the percentage of Canadian high net worth HNW investors who are seeking professional advice with 57 1 per cent doing so in the first quarter of 2015 compared with 48 4 per cent in that same period in 2014 says Capgemini Financial Services and Royal Bank of Canada in 2015 World Wealth Report Furthermore the research shows Canadians are less likely than their global counterparts to use automated advisory services with 31 3 per cent saying they would move to this type of service compared with 48 6 per cent globally On a global basis 76 per cent of wealth managers say they understand the needs of younger HNW clients but only 61 per cent of the younger HNW investors surveyed agree with that statement In fact more than half 54 per cent say they re looking for more support and professional advice from their advisors compared with 49 per cent of older investors The authors of the report say finding a compromise between greater use of technology and more personalized services can make the difference for those younger investors Sales At Classic Car Auction Increase While the S P was dropping during the two weeks of 2015 leading up to the Scottsdale AZ Collector Car Auction Week the auction saw almost 3 000 cars offered with 86 per cent sold among the six auctions an 18 per cent increase over 2014 numbers for a record 293 million in one very frenzied week of action says Peter Volny a classic car collector and regular attendee of the show In Another Year Another Record on the Private Wealth Canada website he says the top sellers of the Barrett Jackson auction were a 1966 Shelby Cobra 427 Super Snake at 5 1 million a 1950 GM Futurliner Parade of Progress Tour Bus for 4 million and a 1954 Pontiac Bonneville Special Motorama Concept Car at 3 3 million June 15 2015 Wealthy Americans Prefer Relationship Managers As wealthy Americans attempt to manage their money without detracting from time with family at work and handling personal priorities a study shows they prefer to rely heavily on relationship managers for navigating their financial futures rather than supporting product specialists The report Hanging in the Balance Conversations with the Futurewealthy by SEI Scorpio Partnership and NPG Wealth Management shows America s futurewealthy preferred working solely with a relationship manager three to one in the areas of financial planning 56 per cent versus 18 per cent developing investment portfolios or help in selecting investment funds 53 per cent versus 17 per cent and direct investments such as stocks and bonds 51 per cent versus 16 per cent Globally the next generation of wealthy shares a preference for their relationship managers over specialists however not to the same degree as Americans For various solutions the global futurewealthy are more evenly split between leveraging solely their relationship managers and having at least some access to specialists Among American respondents who are very satisfied with their relationship manager the top three most important features of an interaction include reviewing overall progress toward existing goals 54 per cent discussing relevant developments and changes within their portfolio 48 per cent and discussing new investment opportunities 41 per cent These are consistent with the global respondents preferences Executives Need To Make Clean Break On Vacations Almost half 43 per cent of chief financial officers CFOs say they are typically in touch with the office at least once a week while on summer vacation says a survey by Robert Half Management Resources RHMR Technology makes it all too easy to connect to work even on our down time It can be difficult to unplug for extended periods and the connectivity that mobile devices allow for makes it hard to resist checking in says David King Canadian president Financial executives often underestimate how important it is to take time to unwind Returning with fresh eyes makes for a clearer outlook greater productivity and better overall decision making King says neglecting to take time away from work affects more than just an executive s individual productivity it affects employees as well With increased emphasis being placed on work life balance employees will feel conflicted if they see their managers checking in off hours Employees need to know that their well being is supported by senior executives Leading by example is the best way to reinforce that message and mitigates the risk of losing star employees to a more flexible work culture To make a clean break while on vacation RHMR suggests these steps set expectations tap your successor s help trust your team manage your return and ease back into work BMO Launches Wealth Index BMO Wealth Management has launched the Wealth Index a snapshot of Canadians financial situations and their ability to manage their wealth The index ranks residents of each province out of a score of 100 on who is most successful in managing their wealth This is determined by looking at a variety of criteria including having reviewing and maintaining a financial plan household debts and assets retirement savings having insurance in place estate planning components rainy day savings and the sustainability of their current financial situation With a score of 72 9 residents of Saskatchewan had the highest score among the provinces Quebec had the second highest score of 71 1 and Alberta was third with 70 6 The national average score was 69 3 Canadians generally scored highest in having a financial strategy and having a life insurance plan in place Lowest scores were in ensuring the efficacy of their financial plan prioritizing retirement savings and having critical illness or disability insurance In addition to questions to determine the index rankings Canadians were asked about how prepared they are to deal with significant life changes such as getting married the birth of a child job loss etc Sixty two per cent are confident that they would be prepared financially while 21 per cent are not very confident that they would be prepared financially Ten per cent are not at all confident that they would be prepared financially Americans Net Worth On Rise A rising stock market and climbing home prices boosted Americans net worth to a new high in the first three months of the year The Federal Reserve says that the value of Americans stock holdings real estate and other assets rose to 84 9 trillion from 83 3 trillion in the final three months of last year Stock portfolios rose 487 billion and home values by 503 billion Still households remained cautious about borrowing Total household debt which includes mortgages credit cards auto loans and other borrowing rose 2 2 per cent the slowest pace since the end of 2013 The federal reserve says greater household wealth can lift spending and economic growth When consumers feel richer they are more likely to spend from their wealth rather than just from income However due to a slow increase in home prices the rise in net worth has primarily benefited wealthier families Improvements Increase Emerging Markets Interest Improvements that happened across emerging markets over the past 10 to 20 years are behind the growing interest in emerging markets debt says Nicolas Jaquier emerging markets economist at Standard Life Investments In an interview with Private Wealth Canada he talked about some of the elements of using this asset class and the growing number of countries where investments can now be considered For the article see Making The Case For Emerging Markets Debt at the Private Wealth Canada website Active Management Looking Good Active management is still looking good in 2015 after years of misery though the picture isn t quite as rosy as it was a few months ago It is outperforming its benchmarks at levels not seen in six years says an analysis from Fundstrat Global Advisors which also shows those who focus on value stocks are also doing well this year While still better than last four years fund managers slipped in past two months says Thomas J Lee its founder and strategist Active managers saw some weakening in performance in the past two months which we attribute in part to heightened market volatility in the past few months Overall 52 per cent of large cap managers are beating their benchmarks with 73 per cent of value managers beating their benchmark BMO Rebrands For EMEA BMO Financial Group s asset management business in Europe the Middle East and Africa EMEA will be rebranding as BMO Global Asset Management The announcement follows last year s acquisition of F C Asset Management plc which will form the centrepiece of the newly branded business F C s institutional intermediated retail and wholesale business will be re branded BMO Global Asset Management F C REIT the direct property investors will be re branded as BMO Real Estate Partners There will be no change to F C s investment trust business No fund names are changing All changes are effective July 6 HSBC Turns Focus Back To Roots HSBC Holdings Britain s largest bank by market value will reduce costs and shift its centre of gravity back towards fast growing Asian economies It is undertaking a significant reshaping of its business portfolio and redeploying resources to capture expected future growth opportunities A key tenet of its strategy is to expand its presence in China and across the Asia Pacific region As well as having a sizeable presence across Asia now HSBC has historic ties to the region It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe However Sharon Wilks head of media relations at HSBC Canada says Canada remains a priority market for HSBC sitting across several key trade corridors HSBC s plans to accelerate its investments in Asia will involve the expansion of the asset management and insurance businesses in a bid to earn more profits from the region s rapidly expanding class of newly wealthy June 8 2015 Wealth Increases Faster For High Income Families Between 1999 and 2012 the average wealth or net worth of Canadian families rose from 319 800 to 554 100 or 73 per cent says Statistics Canada Average wealth increased faster among higher income families during this time period Among the 20 per cent of family units with the highest incomes or top income quintile families average wealth increased by 80 per cent between 1999 and 2012 rising from 721 900 to 1 3 million At the other end of the income spectrum the 20 per cent of families with the lowest incomes or bottom income quintile families increased their average wealth by 38 per cent from 79 500 to 109 300 Over the same period the 20 per cent of families that were in the middle of the income distribution or middle income quintile families increased their average wealth by 73 per cent from 261 800 to 453 300 In addition between 1999 and 2012 the cumulative net worth of Canadian families increased by 4 17 trillion This was the result of a 4 92 trillion increase in the overall values of assets Half of the increase in the overall value of assets was due to real estate while the other half was due to other types of assets including employer pension plans Such results however varied by income quintile Among top quintile families net worth increased by 2 02 trillion About 45 per cent of asset gains were due to real estate and 55 per cent were due to other types of assets Case Made For Integrated Portfolios A case can be made for integrated portfolios says Savina Rizova vice president at Dimensional Fund Advisors Speaking in the session Putting It All Together The Case For Integrated Portfolios she said to create an integrated portfolio the drivers of expected return must be identified However every month there is a new driver of return and many are unlikely to persist over time and are unlikely to re occur In an integrated portfolio investors need to differentiate between those which will persist and those won t The portfolio is built around drivers which provide premiums These premiums must be sensible and logical persistent across time periods pervasive across markets robust to alternative applications and cost effective to capture return in well diversified portfolios These premiums include the market size of the company profitability and expected future cash flow she said Tactical Asset Money Slows New money going into global tactical asset allocation is slowing to a trickle after years of substantial inflows says eVestment LLC For the first quarter of this year the strategy attracted only 1 74 billion in net inflows versus 14 4 billion for the first quarter of 2014 At that rate inflows would total less than 7 billion for all of 2015 That would be a huge drop from what eVestment said was 30 billion in calendar year 2014 and 61 billion in 2013 Aggregate Returns Increased Twenty eight of the 42 Morningstar Canada Fund Indices which measure the aggregate returns of funds in various standard categories increased in May including seven that increased by two per cent or more However three of the fund indices that lost ground decreased by more than two per cent Funds that concentrate on the energy and natural resources sectors suffered a setback after sizeable increases in April The energy equity fund index posted May s worst result with a 5 6 per cent decline The decline in energy had a large effect on funds in the Canadian equity category That index was a poor performer in May decreasing by one per cent Funds in the U S equity and U S small mid cap equity categories which were the worst performers in April had a very different month in May posting increases of 3 5 per cent and 4 2 per cent respectively Responsible Investing Improves Returns Responsible investing is not just good for the environment the community and corporate governance it s good for investors seeking better returns reduced volatility lower risk and more downside protection of capital says an academic study commissioned by OceanRock Investments Inc Canadian RI Mutual Funds Risk Return Characteristics shows that Canadian based RI equity mutual funds outperformed their non RI peers 63 per cent of the time and Canadian based RI fixed income and balanced mutual funds outperformed their non RI peers 67 per cent of the time Previous Canadian studies have linked ESG to better financial returns but none have studied whether taking ESG factors into account can protect against downside risk The study suggests that investors who want to protect their investment assets while enjoying comparable returns should consider adding RI funds to their portfolios Gary Hawton president of OceanRock says Investors need to consider the growing evidence on the benefits of responsible investing to ensure they are making the most of their investment opportunities RI is one of the fastest growing investment

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-06-30 (2016-04-26)
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  • Private Wealth Canada News
    In Numbers More than half 53 per cent of money managers are not confident that the investment performance figures they report are completely accurate says a survey by SimCorp It found 80 per cent of respondents confirmed that portfolio managers do not receive investment performance numbers based on intra day position calculations Furthermore only 59 per cent are able to look through to see the trades prices FX rates and classifications that are driving each portfolio s performance numbers Without accurate and timely information asset managers may misreport performance data to investors and regulators or make ill informed trading decisions potentially putting firms at a competitive disadvantage Marc Mallett vice president of product and managed services at SimCorp North America says If performance data is not up to date there is an inability to see what s actually driving the performance This casts a large doubt on the accurate tracking of investments which does not inspire investor confidence Global Conditions Driving Up Costs Of Expatriate Packages Currency fluctuations driven by economic and political unrest are contributing to the cost of expatriate packages says Mercer in its 21st annual Cost of Living Survey The survey finds that factors including instability of housing markets and inflation for goods and services significantly impact the overall cost of doing business in a global environment Sending employees abroad is necessary to compete in markets and for critical talent and employers need a reliable and accurate reflection of the cost to their bottom line says Ilya Bonic senior partner and president of Mercer s talent business This year Asian and European cities particularly Hong Kong Zurich Singapore and Geneva top the list of most expensive cities for expatriates The costliest city for the third consecutive year is Luanda the capital of Angola Despite being recognized as a relatively inexpensive city the cost of imported goods and safe living conditions in this country are only available at a steep price Bonic says Aligning workforce and mobility strategies by ensuring the right employees are in the right places is more critical than ever to manage globalization And properly compensating employees on international assignments is as important as it is costly June 22 2015 Wealth Gap Getting Wider Millionaires are expected to control nearly half of the world s personal wealth by 2019 suggesting that the wealth gap will continue to widen says The Global Wealth Report from Boston Consulting Group The report says the number of millionaires in the world grew to 17 million in 2014 up from 15 million in 2013 The world s millionaires now control 41 per cent of the 164 trillion in global private wealth up from 40 per cent in 2013 The report said millionaires are expected to control 46 per cent of the world s wealth in 2019 The growing fortunes of the wealthy are owed largely to rising stock markets and asset prices around the world The report says 73 per cent of the gains in global private wealth last year came from market performance on existing assets rather than newly created wealth or businesses By far the U S still has the largest number of millionaires That segment of the population grew by 4 7 per cent last year to 6 9 million China ranked second in millionaire population but had the largest number of new millionaires in 2014 Its millionaire population grew to 3 6 million from 2 4 million in 2014 meaning the world s second largest economy added more than half of the world s two million new millionaires last year Millionaires is defined as households with 1 million in easily monetized wealth cash stock and securities pension funds and other financial assets Their wealth measurement doesn t include real estate business ownership and collectible and consumer goods Global Conditions Driving Up Costs Of Expatriate Packages Currency fluctuations driven by economic and political unrest are contributing to the cost of expatriate packages says Mercer in its 21st annual Cost of Living Survey The survey finds that factors including instability of housing markets and inflation for goods and services impacts significantly the overall cost of doing business in a global environment Sending employees abroad is necessary to compete in markets and for critical talent and employers need a reliable and accurate reflection of the cost to their bottom line says Ilya Bonic senior partner and president of Mercer s talent business This year Asian and European cities particularly Hong Kong Zurich Singapore and Geneva top the list of most expensive cities for expatriates The costliest city for the third consecutive year is Luanda the capital of Angola Bonic says Aligning workforce and mobility strategies by ensuring the right employees are in the right places is more critical than ever to manage globalization And properly compensating employees on international assignments is as important as it is costly More High Earners Shopping Online Brick and mortar stores remain the dominant selling channel for two thirds of high income customers those who earn at least 150 000 per year says a survey by the Luxury Institute However the survey shows that eCommerce is gaining momentum The tendency to make a greater share of purchases in stores increases with age while the preference for buying online is strongest among younger luxury consumers Wealthy women 45 and younger are the demographic group with the lowest share 59 per cent of spending taking place in stores and the highest 41 per cent percentage of luxury spending occurring online Men 65 and older have the greatest share 71 per cent of instore spending Wealthy shoppers cite convenience better prices and wider product selection as reasons they buy online Top reasons for shopping instore are seeing touching feeling and trying on products Many women also mention assessing quality as a reason for going into a store to shop and buy luxury goods Men who purchase online are more likely than women to indicate that they are doing more of their shopping in any given category online than they used to Among online shoppers men are more likely than women to report that they have increased their online shopping in the past 12 months The Luxury Institute says that store traffic is down across the luxury industry due in part to the success of online and mobile platforms but also because luxury brands are falling short in efforts to give wealthy shoppers a reason to shop there Physical stores remain essential in maintaining a brand s visibility while also ringing up a vast majority of sales and smart brands are finding complementary ways to combine brick and mortar stores with new technologies to achieve outstanding results More Canadians Seeking Professional Advice New research finds a rise in the percentage of Canadian high net worth HNW investors who are seeking professional advice with 57 1 per cent doing so in the first quarter of 2015 compared with 48 4 per cent in that same period in 2014 says Capgemini Financial Services and Royal Bank of Canada in 2015 World Wealth Report Furthermore the research shows Canadians are less likely than their global counterparts to use automated advisory services with 31 3 per cent saying they would move to this type of service compared with 48 6 per cent globally On a global basis 76 per cent of wealth managers say they understand the needs of younger HNW clients but only 61 per cent of the younger HNW investors surveyed agree with that statement In fact more than half 54 per cent say they re looking for more support and professional advice from their advisors compared with 49 per cent of older investors The authors of the report say finding a compromise between greater use of technology and more personalized services can make the difference for those younger investors Sales At Classic Car Auction Increase While the S P was dropping during the two weeks of 2015 leading up to the Scottsdale AZ Collector Car Auction Week the auction saw almost 3 000 cars offered with 86 per cent sold among the six auctions an 18 per cent increase over 2014 numbers for a record 293 million in one very frenzied week of action says Peter Volny a classic car collector and regular attendee of the show In Another Year Another Record on the Private Wealth Canada website he says the top sellers of the Barrett Jackson auction were a 1966 Shelby Cobra 427 Super Snake at 5 1 million a 1950 GM Futurliner Parade of Progress Tour Bus for 4 million and a 1954 Pontiac Bonneville Special Motorama Concept Car at 3 3 million June 15 2015 Wealthy Americans Prefer Relationship Managers As wealthy Americans attempt to manage their money without detracting from time with family at work and handling personal priorities a study shows they prefer to rely heavily on relationship managers for navigating their financial futures rather than supporting product specialists The report Hanging in the Balance Conversations with the Futurewealthy by SEI Scorpio Partnership and NPG Wealth Management shows America s futurewealthy preferred working solely with a relationship manager three to one in the areas of financial planning 56 per cent versus 18 per cent developing investment portfolios or help in selecting investment funds 53 per cent versus 17 per cent and direct investments such as stocks and bonds 51 per cent versus 16 per cent Globally the next generation of wealthy shares a preference for their relationship managers over specialists however not to the same degree as Americans For various solutions the global futurewealthy are more evenly split between leveraging solely their relationship managers and having at least some access to specialists Among American respondents who are very satisfied with their relationship manager the top three most important features of an interaction include reviewing overall progress toward existing goals 54 per cent discussing relevant developments and changes within their portfolio 48 per cent and discussing new investment opportunities 41 per cent These are consistent with the global respondents preferences Executives Need To Make Clean Break On Vacations Almost half 43 per cent of chief financial officers CFOs say they are typically in touch with the office at least once a week while on summer vacation says a survey by Robert Half Management Resources RHMR Technology makes it all too easy to connect to work even on our down time It can be difficult to unplug for extended periods and the connectivity that mobile devices allow for makes it hard to resist checking in says David King Canadian president Financial executives often underestimate how important it is to take time to unwind Returning with fresh eyes makes for a clearer outlook greater productivity and better overall decision making King says neglecting to take time away from work affects more than just an executive s individual productivity it affects employees as well With increased emphasis being placed on work life balance employees will feel conflicted if they see their managers checking in off hours Employees need to know that their well being is supported by senior executives Leading by example is the best way to reinforce that message and mitigates the risk of losing star employees to a more flexible work culture To make a clean break while on vacation RHMR suggests these steps set expectations tap your successor s help trust your team manage your return and ease back into work BMO Launches Wealth Index BMO Wealth Management has launched the Wealth Index a snapshot of Canadians financial situations and their ability to manage their wealth The index ranks residents of each province out of a score of 100 on who is most successful in managing their wealth This is determined by looking at a variety of criteria including having reviewing and maintaining a financial plan household debts and assets retirement savings having insurance in place estate planning components rainy day savings and the sustainability of their current financial situation With a score of 72 9 residents of Saskatchewan had the highest score among the provinces Quebec had the second highest score of 71 1 and Alberta was third with 70 6 The national average score was 69 3 Canadians generally scored highest in having a financial strategy and having a life insurance plan in place Lowest scores were in ensuring the efficacy of their financial plan prioritizing retirement savings and having critical illness or disability insurance In addition to questions to determine the index rankings Canadians were asked about how prepared they are to deal with significant life changes such as getting married the birth of a child job loss etc Sixty two per cent are confident that they would be prepared financially while 21 per cent are not very confident that they would be prepared financially Ten per cent are not at all confident that they would be prepared financially Americans Net Worth On Rise A rising stock market and climbing home prices boosted Americans net worth to a new high in the first three months of the year The Federal Reserve says that the value of Americans stock holdings real estate and other assets rose to 84 9 trillion from 83 3 trillion in the final three months of last year Stock portfolios rose 487 billion and home values by 503 billion Still households remained cautious about borrowing Total household debt which includes mortgages credit cards auto loans and other borrowing rose 2 2 per cent the slowest pace since the end of 2013 The federal reserve says greater household wealth can lift spending and economic growth When consumers feel richer they are more likely to spend from their wealth rather than just from income However due to a slow increase in home prices the rise in net worth has primarily benefited wealthier families Improvements Increase Emerging Markets Interest Improvements that happened across emerging markets over the past 10 to 20 years are behind the growing interest in emerging markets debt says Nicolas Jaquier emerging markets economist at Standard Life Investments In an interview with Private Wealth Canada he talked about some of the elements of using this asset class and the growing number of countries where investments can now be considered For the article see Making The Case For Emerging Markets Debt at the Private Wealth Canada website Active Management Looking Good Active management is still looking good in 2015 after years of misery though the picture isn t quite as rosy as it was a few months ago It is outperforming its benchmarks at levels not seen in six years says an analysis from Fundstrat Global Advisors which also shows those who focus on value stocks are also doing well this year While still better than last four years fund managers slipped in past two months says Thomas J Lee its founder and strategist Active managers saw some weakening in performance in the past two months which we attribute in part to heightened market volatility in the past few months Overall 52 per cent of large cap managers are beating their benchmarks with 73 per cent of value managers beating their benchmark BMO Rebrands For EMEA BMO Financial Group s asset management business in Europe the Middle East and Africa EMEA will be rebranding as BMO Global Asset Management The announcement follows last year s acquisition of F C Asset Management plc which will form the centrepiece of the newly branded business F C s institutional intermediated retail and wholesale business will be re branded BMO Global Asset Management F C REIT the direct property investors will be re branded as BMO Real Estate Partners There will be no change to F C s investment trust business No fund names are changing All changes are effective July 6 HSBC Turns Focus Back To Roots HSBC Holdings Britain s largest bank by market value will reduce costs and shift its centre of gravity back towards fast growing Asian economies It is undertaking a significant reshaping of its business portfolio and redeploying resources to capture expected future growth opportunities A key tenet of its strategy is to expand its presence in China and across the Asia Pacific region As well as having a sizeable presence across Asia now HSBC has historic ties to the region It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe However Sharon Wilks head of media relations at HSBC Canada says Canada remains a priority market for HSBC sitting across several key trade corridors HSBC s plans to accelerate its investments in Asia will involve the expansion of the asset management and insurance businesses in a bid to earn more profits from the region s rapidly expanding class of newly wealthy June 8 2015 Wealth Increases Faster For High Income Families Between 1999 and 2012 the average wealth or net worth of Canadian families rose from 319 800 to 554 100 or 73 per cent says Statistics Canada Average wealth increased faster among higher income families during this time period Among the 20 per cent of family units with the highest incomes or top income quintile families average wealth increased by 80 per cent between 1999 and 2012 rising from 721 900 to 1 3 million At the other end of the income spectrum the 20 per cent of families with the lowest incomes or bottom income quintile families increased their average wealth by 38 per cent from 79 500 to 109 300 Over the same period the 20 per cent of families that were in the middle of the income distribution or middle income quintile families increased their average wealth by 73 per cent from 261 800 to 453 300 In addition between 1999 and 2012 the cumulative net worth of Canadian families increased by 4 17 trillion This was the result of a 4 92 trillion increase in the overall values of assets Half of the increase in the overall value of assets was due to real estate while the

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    the most optimistic about future local stock market returns closely followed by Europe 62 per cent and Asia Pacific 56 per cent Latin American investors are the least likely to expect positive local stock market performance with less than half 46 per cent expecting positive returns Likewise less than half 46 per cent of Mexican investors expect the market to finish the year with positive returns This represents a more pessimistic market outlook than last year s survey Globally more than two thirds of investors believe that in the coming year the best equity and fixed income returns will be found outside their home country which echoes Franklin Templeton s 2013 and 2014 survey results Investors in Italy and Chile showed the greatest interest in investing abroad with 85 per cent of investors believing the best equity and fixed income opportunities exist beyond borders Home country bias on the other hand continues to be prevalent in the U S and Canada yet is largely absent in Europe and Latin America May 11 2015 CEOs Mostly Promoted From Within Insiders CEOs promoted from within made up the vast majority of new CEOs at large companies last year The percentage of 2014 s incoming CEOs who already worked at the company climbed to 78 per cent an uptick from 76 per cent in 2013 and a sizeable jump from 71 per cent in 2012 The 15th annual study of CEOs Governance and Success by Strategy a part of the PwC network shows that insiders often give companies some advantages They typically have slightly longer tenures and have delivered higher total shareholder returns annualized and regionally adjusted over their entire tenures Just 17 per cent of incoming CEOs at the highest performing companies have been from a different region over the past five years compared with 11 per cent at the lowest performers In addition women made up five per cent of 2014 s incoming CEOs up from three per cent in 2013 The study shows that the two most startling findings from last year are that between 2004 and 2014 women CEOs have been outsiders more often 33 per cent of women versus 22 per cent of men and have been more often forced out of office 32 per cent of women versus 25 per cent of men Strategy says that although the share of women CEOs worldwide remains low the trends it sees are promising and should have a meaningful effect over time The company expects that a third of all incoming CEOs will be women by 2040 ETF Assets Reach New Record Assets in ETFs ETPs listed in Canada reached a new record of US 69 9 billion says the ETFGI s preliminary monthly ETF and ETP global insight report for April 2015 The Canadian ETF industry had 360 ETFs and with 511 listings from 10 providers listed on one exchange Record levels of assets were reached at the end of April for ETFs ETPs listed globally at US 2 998 trillion in the United States at US 2 132 trillion Europe at US 511 billion Asia Pacific ex Japan at US 125 billion Japan at US 112 billion and Canada at US 69 9 billion Market performance outside the United States contributed to the overall increase in assets invested in ETFs ETPs Developed and emerging markets had a very good month gaining five per cent and eight per cent respectively while in the United States the S P 500 and Dow were up less than one per cent says Deborah Fuhr managing partner of ETFGI Large Cap Faces Extra Challenge While 2015 started on a healthy note for the S P TSX Composite Index which gained 2 6 per cent for the first quarter after two negative quarters a majority of large cap investment managers in Canada faced an extra valiant challenge says Russell Investments Canada Limited s Active Manager Report Valeant Pharmaceuticals International s stock price surged 50 per cent in the quarter and accounted for more than half the benchmark index s gain but only 35 per cent of large cap managers in Canada held Valeant Pharmaceuticals at the start of 2015 Despite this predicament 53 per cent of Canadian large cap managers beat the benchmark for the first quarter albeit down from 65 per cent in the fourth quarter of 2014 In addition the median large cap manager returned 2 9 per cent slightly outperforming the benchmark We know that the Canadian market is prone to concentration issues says Kathleen Wylie head of Canadian equity research at Russell Canada We had Nortel back in 1998 1999 and in recent years the large weight of resources financials and gold stocks in the index has presented challenges for managers at different times Hedge Funds Have Important Role Hedge fund firms and other alternative asset managers are playing an increasingly important role in financing the economy says a paper by the Alternative Investment Management Association The paper says that private debt funds such as hedge funds now manage around 440 billion in assets with some 64 billion of new capital allocated to the sector in 2014 alone It finds that the most popular borrowers of non bank private debt are small and medium sized enterprises SMEs Such businesses are typically too small to raise capital through the public corporate bond market and have been finding it difficult to borrow from the traditional banking sector since the crisis Refinancing existing loans pursuing acquisition and expansion plans and improving working capital are all common uses of such private finance The sector still predominately comprises U S based funds but European and Asian funds have grown significantly in prominence since the financial crisis the paper says Financing the Economy The role of alternative asset managers in the non bank lending environment also finds that private debt funds typically use little or no leverage and are structured in a way to prevent bank style runs or other systemic problems U S Fixed Income

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    doing reasonably well but our global share of FDI is not as high as it once was and it is becoming increasingly dependent on oil and gas says author A E Safarian He advocates an end to foreign investment economic review leaving security to a separate committee and closing some sectors completely or partially to foreign investment as is now the case but with these restrictions subject to periodic mandatory reviews Under the author s proposal Industry Canada would cease reviewing inward FDI for compliance with a net benefit test and would be only one participant in a committee reviewing FDI proposals for national security concerns It would take central responsibility for monitoring federal sectoral foreign ownership restrictions and would regularly review the effect of such restrictions including an assessment of the need to keep them in place or to remove them Canadian Retail Investors More Confident More than two fifths 44 per cent of retail investors in Canada feel more confident about investment opportunities in the next 12 months than they did a year ago says the Schroders Global Investment Trends Survey 2015 In addition 89 per cent of Canadian investors expect to see their investments grow over the next 12 months Retail investors are expecting a strong average return of nine per cent over this period despite planning to allocate 44 per cent of their portfolio to low risk asset classes such as cash The study also shows an increasing appetite for financial investments compared to previous years Of those surveyed two thirds 66 per cent intend to increase or maintain the amount they invest in the year ahead with 44 per cent planning to increase their investment This demonstrates a greater investment appetite within Canada than elsewhere in the world where just half of those questioned intend to maintain or increase their investment this year On average Canadian investors plan to increase the amount they save or invest by 6 2 per cent over the next year Overall 84 per cent of investors in Canada are looking to generate an income from their investments SRI Appeals To Younger Investors While plenty of investors are uninterested in socially responsible investing 47 per cent of affluent investors do not have these investments in their portfolio younger investors are embracing socially responsible investments 25 per cent of investors under the age of 35 commit 25 to 74 per cent of their portfolio to these investments The Spectrem Perspective Investor Perceptions of Socially Responsible and Impact Investing shows more than one quarter of all investors under the age of 45 have at least 25 per cent of their investable assets invested in socially responsible companies Conversely more than 45 percent of all investors over the age of 45 do not invest in socially responsible companies Female investors are more likely to invest more heavily in socially responsible firms 21 per cent of females invest 25 per cent or more of their assets in socially responsible companies compared with 16 per cent of males who devote 25 per cent or more of their portfolios to socially responsible investments The study shows the main reason investors support socially responsible firms is to create a better world for their children and grandchildren Most investors who refuse socially responsible investments invest purely for financial gain Program Designed To Facilitate Conversation BMO has launched its Continuity program designed for affluent clients who at some point may be unable to make financial decisions and designate BMO Private Banking to act in their interests while they are living With seniors facing the prospect of disease and reduced cognitive ability there should be greater discussion about what happens to their finances if they are incapable of making their own decisions says Gord Graves vice president and national director trust and estate services for the private banking arm of Bank of Montreal BMO The bank hopes to facilitate this conversation through the new program One of the initial steps within the implementation of BMO s program is encouraging private banking advisors to discuss long term decision making with their clients and knowing when to bring in the firm s estate specialists The services offered through the program include investment management cash management including the paying of bills private banking services power of attorney regarding property facilitation of tax preparation and lifestyle services Lifestyle services could range from ensuring the client s driveway is shoveled during the winter to providing access to personal support workers The program would require a minimum of 500 000 in investible assets with fees beginning at 2 1 per cent of those assets and declining with an increase in assets BMO Continuity would also include the firm s estate services in the offering The program is being focused on clients who are in their 70s as this is the time period when people are facing certain realities such as illness or watching friends or family passing away says Graves Investors Should Not React In Haste To Bond Market Stock market investors should review their portfolios be vigilant and seek out potential opportunities in response to the global bond market sell off says Nigel Green deVere Group s founder and chief executive This suggestion comes as the woes surrounding government bonds prompt wider market volatility It is still too soon to say if this is the start of the bear market in bonds that some analysts have been forecasting for the last couple of years he says Unsure if this is a blip or not now is not the time for hasty decisions Whenever there is a fall out or periods of heightened market turmoil there will always be opportunities for investors and it s up to financial advisors to seek out the right ones for their clients Green says bonds have had an overdue correction in some countries whilst other countries appear to have had a more knee jerk reaction We could indeed have reached a turning point for the bond market but investors shouldn t react with haste at this point Digital Wealth Management Here To Stay Digital wealth management firms have introduced disruptive industry changes that are here to stay and traditional players need to act quickly to determine how to stay competitive says EY While some have discounted the robo advisor movement as no match to human investment advice EY s report Advice goes virtual how new digital investment services are changing the wealth management landscape suggests otherwise It says digital entrants efforts to streamline the online client experience provide greater transparency and lower prices for lower end markets have gained traction and can t be ignored by Canada s wealth management industry anymore We have yet to see how the digital models will hold up in a market downturn and whether they will reach profitability quickly enough but the improved client experience and high level of transparency can t be underestimated says Gregory Smith wealth management advisory leader at EY They re also tapping into markets that are largely ignored by traditional wealth managers Traditional firms have largely focused on high net worth clients but these emerging digital firms are targeting a wider range of clients across all demographics While the tech savvy millennial generation is the natural target for automated investment advice baby boomers are another promising market As they retire and switch from investing money to withdrawing money they too will be eager to use their mobile devices and tablets to check their portfolio balance withdrawals and fees at the touch of a button EY says in addition the greatest wealth transfer in history is currently underway as baby boomers pass along wealth to their heirs This is creating more pressure on the traditional model because the next generation of clients demands transparency accessibility and seamless customer experience across all digital devices As of 2011 there are over nine million baby boomers in Canada making them the largest generational client base They are closely followed by their children the computer savvy Generation Y or Millennials RBC GAM Launches ETFs RBC Global Asset Management Inc has launched its RBC Quant Equity Leaders suite of Exchange Traded Funds ETFs designed to offer investors and advisors diversified core equity exposure in Canadian U S and international markets RBC GAM says these ETFs expand upon the popular rules based investment approach of RBC Quant Dividend Leaders ETFs to provide broad core market exposure to a diversified portfolio of high quality securities Unlike traditional core strategies RBC Quant Equity Leaders ETFs do not follow an index but rather use a rules based multi factor investment approach that seeks to avoid companies with low quality of earnings expensive valuations and slow growth and applies a unique modified cap weighting methodology RBC Quant Canadian Equity Leaders ETF RCE seeks to provide long term capital growth by focusing on companies domiciled in Canada and following the rules based Quant Equity Leaders investment process RBC Quant U S Equity Leaders ETF RUE seeks to provide long term capital growth appreciation by focusing on companies domiciled in the U S by following the rules based Quant Equity Leaders investment process RBC Quant EAFE Equity Leaders ETF RIE seeks to provide long term capital growth by focusing on international companies by following the rules based Quant Equity Leaders investment process RBC GAM also launched two currency hedged ETFs RBC Quant U S Equity Leaders CAD Hedged ETF RHS and RBC Quant EAFE Equity Leaders CAD Hedged ETF RHF Local Markets Will Be Positive More than half 58 per cent of global investors surveyed believe their local stock market will post positive returns in 2015 says the 2015 Franklin Templeton Global Investor Sentiment Survey Regionally the U S and Canada 64 per cent are the most optimistic about future local stock market returns closely followed by Europe 62 per cent and Asia Pacific 56 per cent Latin American investors are the least likely to expect positive local stock market performance with less than half 46 per cent expecting positive returns Likewise less than half 46 per cent of Mexican investors expect the market to finish the year with positive returns This represents a more pessimistic market outlook than last year s survey Globally more than two thirds of investors believe that in the coming year the best equity and fixed income returns will be found outside their home country which echoes Franklin Templeton s 2013 and 2014 survey results Investors in Italy and Chile showed the greatest interest in investing abroad with 85 per cent of investors believing the best equity and fixed income opportunities exist beyond borders Home country bias on the other hand continues to be prevalent in the U S and Canada yet is largely absent in Europe and Latin America May 11 2015 CEOs Mostly Promoted From Within Insiders CEOs promoted from within made up the vast majority of new CEOs at large companies last year The percentage of 2014 s incoming CEOs who already worked at the company climbed to 78 per cent an uptick from 76 per cent in 2013 and a sizeable jump from 71 per cent in 2012 The 15th annual study of CEOs Governance and Success by Strategy a part of the PwC network shows that insiders often give companies some advantages They typically have slightly longer tenures and have delivered higher total shareholder returns annualized and regionally adjusted over their entire tenures Just 17 per cent of incoming CEOs at the highest performing companies have been from a different region over the past five years compared with 11 per cent at the lowest performers In addition women made up five per cent of 2014 s incoming CEOs up from three per cent in 2013 The study shows that the two most startling findings from last year are that between 2004 and 2014 women CEOs have been outsiders more often 33 per cent of women versus 22 per cent of men and have been more often forced out of office 32 per cent of women versus 25 per cent of men Strategy says that although the share of women CEOs worldwide remains low the trends it sees are promising and should have a meaningful effect over time The company expects that a third of all incoming CEOs will be women by 2040 ETF Assets Reach New Record Assets in ETFs ETPs listed in Canada reached a new record of US 69 9 billion says the ETFGI s preliminary monthly ETF and ETP global insight report for April 2015 The Canadian ETF industry had 360 ETFs and with 511 listings from 10 providers listed on one exchange Record levels of assets were reached at the end of April for ETFs ETPs listed globally at US 2 998 trillion in the United States at US 2 132 trillion Europe at US 511 billion Asia Pacific ex Japan at US 125 billion Japan at US 112 billion and Canada at US 69 9 billion Market performance outside the United States contributed to the overall increase in assets invested in ETFs ETPs Developed and emerging markets had a very good month gaining five per cent and eight per cent respectively while in the United States the S P 500 and Dow were up less than one per cent says Deborah Fuhr managing partner of ETFGI Large Cap Faces Extra Challenge While 2015 started on a healthy note for the S P TSX Composite Index which gained 2 6 per cent for the first quarter after two negative quarters a majority of large cap investment managers in Canada faced an extra valiant challenge says Russell Investments Canada Limited s Active Manager Report Valeant Pharmaceuticals International s stock price surged 50 per cent in the quarter and accounted for more than half the benchmark index s gain but only 35 per cent of large cap managers in Canada held Valeant Pharmaceuticals at the start of 2015 Despite this predicament 53 per cent of Canadian large cap managers beat the benchmark for the first quarter albeit down from 65 per cent in the fourth quarter of 2014 In addition the median large cap manager returned 2 9 per cent slightly outperforming the benchmark We know that the Canadian market is prone to concentration issues says Kathleen Wylie head of Canadian equity research at Russell Canada We had Nortel back in 1998 1999 and in recent years the large weight of resources financials and gold stocks in the index has presented challenges for managers at different times Hedge Funds Have Important Role Hedge fund firms and other alternative asset managers are playing an increasingly important role in financing the economy says a paper by the Alternative Investment Management Association The paper says that private debt funds such as hedge funds now manage around 440 billion in assets with some 64 billion of new capital allocated to the sector in 2014 alone It finds that the most popular borrowers of non bank private debt are small and medium sized enterprises SMEs Such businesses are typically too small to raise capital through the public corporate bond market and have been finding it difficult to borrow from the traditional banking sector since the crisis Refinancing existing loans pursuing acquisition and expansion plans and improving working capital are all common uses of such private finance The sector still predominately comprises U S based funds but European and Asian funds have grown significantly in prominence since the financial crisis the paper says Financing the Economy The role of alternative asset managers in the non bank lending environment also finds that private debt funds typically use little or no leverage and are structured in a way to prevent bank style runs or other systemic problems U S Fixed Income Most Popular U S fixed income was the most popular asset allocation search by investors across the globe in 2014 says a report from Mercer which also shows demand for equities managers continued to dwindle It advised clients on 963 searches in 2014 representing 77 8 billion of assets placed in new allocations Its 2013 Global Manager Search Trends report showed 760 total searches with 60 6 billion in total assets placed The top asset class for searches in 2014 was U S fixed income at 188 searches Within overall fixed income searches multi asset credit searches totaled 24 up from 19 in 2013 and zero in 2012 U S equities was second with 89 searches followed by international multi asset strategies with 74 searches Equities continued to fall in popularity with 317 searches conducted in 2014 That compared with 390 in 2013 446 in 2012 471 in 2011 and 531 in 2010 China Equity Performs Best Seventeen of the 42 fund indices increased during April including seven that increased by two per cent or more says Morningstar s April 2015 preliminary performance report However three of the fund indices that lost ground decreased by more than two per cent Funds in the Greater China equity category were the best performers as the fund index that tracks this category increased by 9 5 per cent in April Both the Shanghai and Hong Kong stock markets posted double digit gains for the month but a strengthening Canadian dollar versus major Asian currencies mitigated the effect for Canadian investors Energy sector funds had their best monthly return of the past year with a 7 4 per cent increase while Canadian equity funds posted an aggregate increase of 1 7 per cent in April underperforming the S P TSX Composite Index s 2 4 per cent gain for the month The worst performing fund indices were the ones that track the U S equity and U S small mid cap equity categories with decreases of 3 2 per cent and 5 1 per cent respectively Stock markets in the United States were flat to slightly positive but currency effects negatively impacted these funds as the U S dollar depreciated by 4 4 per cent during the month versus its Canadian counterpart

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    mortgages and above average dual incomes The predominant preference among the Generation Y segment of first time luxury homebuyers is for presale or new condominiums This generation is willing to sacrifice space in favour of a trendy and urban location treating neighbourhoods as a direct extension of their personal living space Ford Lincoln To Be Resurrected Ford Motor Co will resurrect the Lincoln Continental as its top of the line luxury sedan hoping the classic name will help rebuild the brand s image in the U S and China Ford retired the Continental name in 2002 and joined its rivals in using letter and number codes for most models The Continental has been designed for both the U S and Chinese markets which have far more similarities than differences according to Mark Fields Ford CEO He says the biggest difference is that Chinese luxury car buyers are often chauffeured leading Ford to focus on offering a wide range of passenger amenities The concept vehicle includes a backseat computer system reclining rear seats and smart windows that turn opaque with a tap of the finger to reduce the temperature The car debuts a new look for Lincoln with a grille and stance that lean more toward Jaguar or Maserati than Cadillac or BMW This is the latest effort from Lincoln in a 2 5 billion renovation of the brand The Continental is slated for release next year Investors Sitting At Table For long term real estate investors the question has evolved beyond how can one make money in real estate to how do I choose the right vehicle on which to build my real estate empire However in the article Investors Invited To Real Estate Table at the Private Wealth Canada website Bob Carter of Bob Carter Investments says developers are now inviting investors to put money directly into their products ETFs Reach Record Levels Record levels of assets were reached at the end of the first quarter for ETFs ETPs listed globally at US 2 926 trillion says ETFGI s ETF and ETP global insight report for the quarter Of those assets the United States accounted for US 2 094 trillion Asia Pacific ex Japan had US 119 6 billion and Japan totalled US 109 3 billion Record levels of net new assets NNA were reached in the quarter The U S gathered US 95 99 billion a significant increase on the US 37 2 billion in the same quarter last year The global ETF ETP industry had 5 669 ETFs ETPs with 10 961 listings from 247 providers listed on 63 exchanges in 51 countries Euro Causes Private Equity Loss A weakening Euro during 2014 s penultimate quarter contributed to a loss as measured in U S dollars for private equity investments in developed global markets outside the U S the first following a string of eight consecutive positive quarterly returns says the Cambridge Associates LLC Global ex U S Developed Markets Private Equity and Venture Capital Index Funds investing private equity in emerging markets did better ending the third quarter with a positive return Both classes of alternative assets outperformed their public market counterparts for the period For the quarter ending September 30 2014 the index fell five per cent for the 12 month period ending on the same date it rose 10 9 per cent For the same periods respectively the MSCI EAFE returned 5 9 per cent and 4 3 per cent India Can t Be Ignored With a population of one billion people we can no more ignore India as an investment destination as we can shut out the sights and sounds when visiting this immense and complicated country says Jim Hall CIO of Mawer Investment Management Writing in its Art of Boring blog www artofboring com he says India is on many investors minds these days as it is one of the few markets in the world in which investor optimism is upbeat However while investors have reason to be excited about India s economic growth the wait and see approach is still the soundest for investors looking at any country unlocking its potential There are many long term thematic trends and short term indicators that positive change is afoot in the seventh largest and second most populous country in South Asia but the market seems to have already priced in this potential into asset valuations he says Just as concerning investments made by the overzealous may provide little cushion for anything that goes wrong Funds Sit In Red After posting solid gains in January and February many fund categories in Canada were in the red for the month of March says data from Morningstar Research Inc However they still had positive results for the first quarter of 2015 Thirty two of its Canada fund indices decreased during March but 22 of those indices decreased less than one per cent Asian equity funds were the best performers for both the month and the first quarter Other strong performers during the first three months of 2015 include international equity European equity Asia Pacific equity and global equity fund indices which all increased by 12 per cent to 13 per cent Domestic equity funds lost some ground in March but still eked out positive results for the quarter Economic Outlook Remains Cautious Lower oil prices continue to dampen the overall sales outlook of firms weighing on investment and hiring intentions says the Bank of Canada s spring Business Outlook Survey However a majority of businesses are benefiting from the strong economic outlook in the U S and the boost in competitiveness from the weaker Canadian dollar Firms expect little change in input price inflation over the next 12 months but they anticipate that output prices will increase at a somewhat faster rate reflecting the effects of the recent depreciation of the Canadian dollar The balance of opinion on credit conditions suggests an easing over the past three months Business Owners Not Prepared For Succession Just over

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