archive-ca.com » CA » P » PRIVATEWEALTHMAGAZINE.CA

Total: 201

Choose link from "Titles, links and description words view":

Or switch to "Titles and links view".
  • Private Wealth Canada News
    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

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-05-02 (2016-04-26)
    Open archived version from archive


  • Private Wealth Canada News
    and the ability of a company to anticipate their needs However despite relatively high satisfaction younger consumers still see plenty of room for improvement in quality craftsmanship and customer service Manulife Launches Private Investment Pool Manulife Investments a division of Manulife Asset Management Limited has launched its Manulife Private Investment Pool Manulife U S Balanced Value Private Trust and two new mutual funds the Manulife Strategic Investment Grade Global Bond Fund and the Manulife U S Dollar Strategic Income Fund The U S balanced value private trust will join the private investment pools platform geared towards affluent investors and will primarily invest in U S dividend paying equity and fixed income securities Inspired by its U S monthly high income fund the pool applies the same investment objective process and strategy but within the pooled program which includes competitive fees and the ability to allow households to group accounts to potentially receive greater management fee reductions Google Developing Smartwatch Swiss luxury watchmaker Tag Heuer is developing an Android powered smartwatch in partnership with Google and Intel The device should be launched at the end of the year but insiders aren t releasing details just yet Media reports suggest the device could be based on the iconic flagship Carrera model Any device from the LVMH owned Tag Heuer would compete against Apple s 10 000 edition version of its smartwatch Jean Claude Biver CEO of Tag Heuer doesn t want to compare the new smartwatch with the Apple device He says The difference between the Apple Watch and the Tag Heuer watch is very important One is called Apple and one is called Tag Heuer he says Global smartwatch shipments are set to explode this year growing 511 per cent from 4 6 million units in 2014 to 28 1 million units in 2015 with Apple expected to have 55 per cent of the worldwide market share says Strategy Analytics OECD Reduces Forecast For Canada The OECD has reduced its 2015 and 2016 economic growth forecasts for Canada citing the drag caused by a significant drop in prices for oil and other commodities since its previous outlook in November It is now estimating Canada s economy will grow by 2 2 per cent this year 0 4 less than previously thought Next year s forecast has been trimmed to 2 1 per cent down 0 3 Canada is among the countries that has been affected by the sharp decline in oil and commodity prices while others particularly in Europe and Asia will benefit from the sharp drop in oil prices to six year lows Its forecast for overall global growth has been increased by 0 1 to four per cent this year and by 0 2 to 4 3 per cent in 2016 U S Equity Holdings Reduced Money managers are reducing U S equity holdings amid expectations of a U S rate hike says the Bank of America Merrill Lynch s monthly fund manager survey Thirty four per cent of respondents expect the Federal Reserve to raise rates in the second quarter up from 28 per cent last month Forty one per cent of managers expect a rate hike in the third quarter As a result a net 19 per cent of respondents reported being underweight U S equities the highest reading since January 2008 and down from a net six per cent overweight in February Allocations to emerging markets equities also decreased in March A net 11 per cent of respondents reported being underweight the asset class compared to a net one per cent underweight last month A net 57 per cent of respondents also said global emerging markets equities is the asset class they would most like to underweight in the next 12 months Managed Accounts Resist Fee Compression Managed account programs are largely resistant to fee compression says research from Cerulli Associates Within its managed accounts practice the questions most frequently asked by our clients relate to fees says Tom O Shea associate director at Cerulli Since 2008 there has been very little price change in the explicit fees that consumers pay for sub advisory separate accounts mutual fund accounts rep as portfolio manager and rep as advisor accounts The explicit costs of all programs with the exception of unified managed accounts UMAs varied only three to six basis points between 2008 and 2014 In contrast the explicit fee for UMAs dropped 20 basis points during the same time period Global Recovery Looks Weaker The global economic recovery is looking weaker due to gloomier prospects for emerging markets says a Fitch Ratings forecast Its global growth forecast has weakened since its December estimates declining by 0 2 percentage points for 2015 due entirely to revisions to its outlook for emerging markets Its forecast for 2016 is unchanged It now estimates that world GDP growth will come in at 2 7 per cent in 2015 and three per cent 2016 up from 2 5 per cent in 2014 driven by the continued recovery of the major advanced economies the U S the Eurozone and Japan However emerging markets will continue to slow due to recessions in Russia and Brazil and a structural adjustment in China It forecasts emerging markets GDP growth will slow to 3 6 per cent in 2015 before edging up again to 4 2 per cent in 2016 Equity ETFs Gather Largest Inflows In February 2015 ETFs ETPs listed in Canada saw net inflows of US 1 2 billion Equity ETFs ETPs gathered the largest net inflows with US 743 million followed by fixed income ETFs ETPs with US 290 million while commodity ETFs ETPs experienced net outflows of US 29 million says ETFGI s monthly ETF and ETP global insight report for February The Canadian ETF industry had 355 ETFs with 502 listings assets of US 65 billion from nine providers on one exchange at the end of February Investors allocated the majority of net new assets to equities as the U S market rebounded from a difficult January to end February with both the S P 500 and the Dow up six per cent for the month Volatility declined during the month Developed markets were up six per cent for the month while emerging and frontier markets were up three per cent says Deborah Fuhr managing partner of ETFGI March 16 2015 Affluent Households On The Rise The number of U S households with a net worth of 1 million or more not including primary residence reached a new high of 10 1 million in 2014 says Spectrem Group s Market Insights Report 2015 The total is an increase of nearly 500 000 households up from 9 63 million in 2013 There were 29 5 million mass affluent households with a net worth between 100 000 and 1 million in 2014 The millionaire segment with a net worth between 1 million and 5 million grew by 400 000 to 8 8 million The ultra high net worth market net worth between 5 million and 25 million grew to 1 2 million an increase of 60 000 over 2013 Among the 25 million plus segment there were 142 000 households an increase of 10 000 The number of wealthy American households is at its highest point ever continuing the recovery from 2008 and 2009 says George H Walper Jr president of Spectrem Group In particular investors with more than 1 million net worth are now at 10 1 million breaking the 10 million threshold for the first time Given the record level stock market in 2014 along with a full recovery of investment real estate and investors perceptions of value in their own privately held businesses it is not surprising that we re seeing these record numbers Americans Want To Maintain Their Lifestyle In Retirement A strong majority of U S respondents 72 per cent say their primary goal of investing is to maintain their current lifestyle later in life including throughout retirement says Legg Mason s Global Investment Survey To do this survey results suggest affluent Americans on average will need to save at least 2 5 million before they retire Asked if they were making progress on this challenging goal almost four in 10 38 per cent said they were not doing well or only doing somewhat well Taking all retirement readiness factors together Legg Mason finds just 40 per cent of those surveyed said they were confident in their ability to retire at the age I want to while 60 per cent were either not confident or somewhat confident The sample has average retirement plan savings of 385 000 and is close to age 58 Seventy per cent of respondents said they had a defined contribution plan holding substantial portions of their net savings Given their ambitious goals investors hopefully have considerable savings elsewhere such as significant equity in their home or other investment accounts where their asset allocation is designed to help them achieve their long term goals says Matthew Schiffman global head of marketing for Legg Mason Otherwise reaching their 2 5 million goal could be extremely challenging Apple Watch Available Soon Apple says its Apple Watch is available at Apple retail store or select department stores and boutiques The line of three smartwatches will be on view and available for presale at Apple retail stores in several countries beginning April 10 and can be bought on April 24 Apple stores will have designated display cases to show all of the different ways people can customize the smartwatch with different bands and faces The company will also sell the watches in department stores and boutiques The devices will also be available on Apple s online store The entry level model the aluminum and glass Apple Watch Sport with a plastic band starts at 349 The mid range stainless steel cased watches range from 549 to 1 099 depending on the type of band customers choose The 18 karat gold Apple Watch Edition will go for a starting price of 10 000 The devices must be paired with an iPhone and are compatible with the iPhone 5 5C 5S 6 and 6 Plus The smartwatches will launch in more than a half dozen countries including the U S the UK Australia and China JW Marriott Named Turkey s Best The JW Marriott Hotel Ankara was named Turkey s best luxury business hotel during the World Luxury Hotel Awards In addition the hotel s Karma Spa Wellness and Fitness Club was recognized as Europe s best luxury fitness spa The JW Marriott offers amenities such as the spa 24 hour room service a variety of guest rooms and suites and a lineup of six venues that includes a JW Steakhouse and the Skye Vue Lounge The spa offers signature treatments and traditional massages along with skin care programs and therapies designed to make patrons feel revived and purified Hotel guests have full access to the spa and the fitness centre offers indoor and outdoor pools a large whirlpool state of the art exercise equipment and a variety of classes Personal spa services including massages therapies and facial and body treatments are available for a fee Wall Street Leaders Need To Walk The Talk Leaders of all Wall Street institutions need to spend more time talking about how to best serve their customers and walk the talk when it comes to placing the customer s interest first says Winthrop H Smith a former executive vice president of Merrill Lynch Co In the article Bring Main Street Back To Wall Street at the Private Wealth Canada website he says there needs to be a return to the revolutionary approach to investing that Merrill Lynch Pierce Fenner Beane created in the 1940s which brought a belief that capital markets could be democratized and that Wall Street could be brought to Main Street Hedge Fund Industry Transforming The hedge fund industry is transforming with managers increasingly focused on customized products and solutions new investors and emerging markets says a report by KPMG International the Managed Funds Association MFA and the Alternative Investment Management Association AIMA Growing Up A New Environment for Hedge Funds found a majority of hedge fund managers expect a significant shift in their primary sources of capital to pension funds over the next five years almost 70 per cent of managers said they offer or plan to offer custom investment solutions and more than two thirds of managers anticipate using specialized fee structures to attract investment The report finds further evidence that the growth of the hedge fund industry is being driven today largely by institutional investors rather than individuals Most say that pension funds both corporate and public would be their primary sources of capital by 2020 Forty six per cent of managers said that over the next five years they would either alter their fund strategy or launch new products to attract capital from pension funds It also shows regulation is seen as the biggest threat to the growth of the hedge fund industry as cited by more than three quarters of managers Private Equity Returns Remain Positive Returns on U S private equity and venture capital funds based in the U S remained positive in the quarter ending September 30 2014 though both were down from their second quarter results says Cambridge Associates Venture capital benefitting from a healthy IPO market outperformed private equity in the third quarter while both outpaced key public market indices Its U S private equity index rose 1 7 per cent in the quarter Over the same period the U S venture capital index was up 2 4 per cent For comparison the S P 500 was up 1 1 per cent The third quarter marked the ninth consecutive quarter of positive returns for the private equity benchmarks and the 12th consecutive quarter for venture capital Economic Forecast Downgraded RBC Economics downgraded its forecast for the Canadian economy in 2015 after a sharp drop in energy prices The RBC Economic Outlook says Canada s real GDP is projected to grow by 2 4 per cent this year a reduction of 0 3 percentage points from the forecast issued in December RBC notes that while the drop in energy prices is clearly a negative for Canada s oil and gas sector much of the weakening will be offset by strength in consumer spending and exports RBC says that exports will provide a lifeline to Canada s economy this year after a strong performance in 2014 when volume increased by 5 4 per cent the best showing in four years March 9 2015 Sustainable Investing Gaining Momentum Most active retail investors expect to see the trend to more environmentally conscious investing continue in the next few years says a survey by Morgan Stanley Institute for Sustainable Investing The report says that 71 per cent of active individual investors describe themselves as interested in sustainable investing and 65 per cent believe sustainable investing will become more prevalent over the next five years The survey also finds that the millennial generation and women are leading the way Millennials are most open to the idea of sustainable investing compared with generation X and the baby boom generation They are twice as likely to invest in companies or funds that target specific social environmental outcomes and divest because of objectionable corporate activity Additionally 76 per cent of women report an interest in sustainable investing compared to 62 per cent of men Female investors are nearly twice as likely as male investors to consider rate of return as well as the impact of their investment when making an investment decision Companies Take On Divesting Strategies Divestments will be a core component of companies capital strategy in the next year as management teams address pressure to improve portfolio performance and shareholder returns says EY s Global Corporate Divestment Study Closing the deal strategies to increase speed and value The report says more than half of executives 54 per cent expect the number of strategic sellers to increase in the next year Given the potential benefits of divesting assets 47 per cent of companies say that even if they weren t looking to divest they would be willing to sell at a premium in the range of 10 to 20 per cent and a third would go below 10 per cent The report says for many companies divestment is a key path to achieving growth and 74 per cent of respondents used funds from their most recent divestment for growth Specifically 34 per cent reinvested the funds back into the core business 23 per cent invested in new products markets or geographies and 17 per cent made an acquisition The financial benefits of divestments are undeniable considering 66 per cent of companies saw an increased valuation multiple in the remaining business after their last asset sale Canadians Make Forbes Billionaire List Thirty Canadians are on Forbes annual list of world billionaires Media magnate and Thomson Reuters chairman David Thomson continued as Canada s dominant billionaire for 2015 His overall net worth was placed at more than 25 billion Globally he is the 25th richest man on earth Next is retail and grocery giant Galen Weston whose family fortune is more than 9 billion according to Forbes He is the 131st richest man on the global list Jim Pattison founder chairman and CEO of the Jim Pattison Group is the third Canadian on the list His fortune of 7 5 billion made him snag the 177th spot on the global list James Irving owner of his self named conglomerate was Canada s fourth billionaire and the world s 216th with a net worth of 6 5 billion Canada s fifth billionaire was Joseph Tsai Alibaba Group s vice chairman Forbes saw him move up four spots from 2014 after the eCommerce company started trading in the U S Worth more than 5 billion Tsai is the world s 248th richest man Rounding out Canada

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-04-01 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    and the ability of a company to anticipate their needs However despite relatively high satisfaction younger consumers still see plenty of room for improvement in quality craftsmanship and customer service Manulife Launches Private Investment Pool Manulife Investments a division of Manulife Asset Management Limited has launched its Manulife Private Investment Pool Manulife U S Balanced Value Private Trust and two new mutual funds the Manulife Strategic Investment Grade Global Bond Fund and the Manulife U S Dollar Strategic Income Fund The U S balanced value private trust will join the private investment pools platform geared towards affluent investors and will primarily invest in U S dividend paying equity and fixed income securities Inspired by its U S monthly high income fund the pool applies the same investment objective process and strategy but within the pooled program which includes competitive fees and the ability to allow households to group accounts to potentially receive greater management fee reductions Google Developing Smartwatch Swiss luxury watchmaker Tag Heuer is developing an Android powered smartwatch in partnership with Google and Intel The device should be launched at the end of the year but insiders aren t releasing details just yet Media reports suggest the device could be based on the iconic flagship Carrera model Any device from the LVMH owned Tag Heuer would compete against Apple s 10 000 edition version of its smartwatch Jean Claude Biver CEO of Tag Heuer doesn t want to compare the new smartwatch with the Apple device He says The difference between the Apple Watch and the Tag Heuer watch is very important One is called Apple and one is called Tag Heuer he says Global smartwatch shipments are set to explode this year growing 511 per cent from 4 6 million units in 2014 to 28 1 million units in 2015 with Apple expected to have 55 per cent of the worldwide market share says Strategy Analytics OECD Reduces Forecast For Canada The OECD has reduced its 2015 and 2016 economic growth forecasts for Canada citing the drag caused by a significant drop in prices for oil and other commodities since its previous outlook in November It is now estimating Canada s economy will grow by 2 2 per cent this year 0 4 less than previously thought Next year s forecast has been trimmed to 2 1 per cent down 0 3 Canada is among the countries that has been affected by the sharp decline in oil and commodity prices while others particularly in Europe and Asia will benefit from the sharp drop in oil prices to six year lows Its forecast for overall global growth has been increased by 0 1 to four per cent this year and by 0 2 to 4 3 per cent in 2016 U S Equity Holdings Reduced Money managers are reducing U S equity holdings amid expectations of a U S rate hike says the Bank of America Merrill Lynch s monthly fund manager survey Thirty four per cent of respondents expect the Federal Reserve to raise rates in the second quarter up from 28 per cent last month Forty one per cent of managers expect a rate hike in the third quarter As a result a net 19 per cent of respondents reported being underweight U S equities the highest reading since January 2008 and down from a net six per cent overweight in February Allocations to emerging markets equities also decreased in March A net 11 per cent of respondents reported being underweight the asset class compared to a net one per cent underweight last month A net 57 per cent of respondents also said global emerging markets equities is the asset class they would most like to underweight in the next 12 months Managed Accounts Resist Fee Compression Managed account programs are largely resistant to fee compression says research from Cerulli Associates Within its managed accounts practice the questions most frequently asked by our clients relate to fees says Tom O Shea associate director at Cerulli Since 2008 there has been very little price change in the explicit fees that consumers pay for sub advisory separate accounts mutual fund accounts rep as portfolio manager and rep as advisor accounts The explicit costs of all programs with the exception of unified managed accounts UMAs varied only three to six basis points between 2008 and 2014 In contrast the explicit fee for UMAs dropped 20 basis points during the same time period Global Recovery Looks Weaker The global economic recovery is looking weaker due to gloomier prospects for emerging markets says a Fitch Ratings forecast Its global growth forecast has weakened since its December estimates declining by 0 2 percentage points for 2015 due entirely to revisions to its outlook for emerging markets Its forecast for 2016 is unchanged It now estimates that world GDP growth will come in at 2 7 per cent in 2015 and three per cent 2016 up from 2 5 per cent in 2014 driven by the continued recovery of the major advanced economies the U S the Eurozone and Japan However emerging markets will continue to slow due to recessions in Russia and Brazil and a structural adjustment in China It forecasts emerging markets GDP growth will slow to 3 6 per cent in 2015 before edging up again to 4 2 per cent in 2016 Equity ETFs Gather Largest Inflows In February 2015 ETFs ETPs listed in Canada saw net inflows of US 1 2 billion Equity ETFs ETPs gathered the largest net inflows with US 743 million followed by fixed income ETFs ETPs with US 290 million while commodity ETFs ETPs experienced net outflows of US 29 million says ETFGI s monthly ETF and ETP global insight report for February The Canadian ETF industry had 355 ETFs with 502 listings assets of US 65 billion from nine providers on one exchange at the end of February Investors allocated the majority of net new assets to equities as the U S market rebounded from a difficult January to end February with both the S P 500 and the Dow up six per cent for the month Volatility declined during the month Developed markets were up six per cent for the month while emerging and frontier markets were up three per cent says Deborah Fuhr managing partner of ETFGI March 16 2015 Affluent Households On The Rise The number of U S households with a net worth of 1 million or more not including primary residence reached a new high of 10 1 million in 2014 says Spectrem Group s Market Insights Report 2015 The total is an increase of nearly 500 000 households up from 9 63 million in 2013 There were 29 5 million mass affluent households with a net worth between 100 000 and 1 million in 2014 The millionaire segment with a net worth between 1 million and 5 million grew by 400 000 to 8 8 million The ultra high net worth market net worth between 5 million and 25 million grew to 1 2 million an increase of 60 000 over 2013 Among the 25 million plus segment there were 142 000 households an increase of 10 000 The number of wealthy American households is at its highest point ever continuing the recovery from 2008 and 2009 says George H Walper Jr president of Spectrem Group In particular investors with more than 1 million net worth are now at 10 1 million breaking the 10 million threshold for the first time Given the record level stock market in 2014 along with a full recovery of investment real estate and investors perceptions of value in their own privately held businesses it is not surprising that we re seeing these record numbers Americans Want To Maintain Their Lifestyle In Retirement A strong majority of U S respondents 72 per cent say their primary goal of investing is to maintain their current lifestyle later in life including throughout retirement says Legg Mason s Global Investment Survey To do this survey results suggest affluent Americans on average will need to save at least 2 5 million before they retire Asked if they were making progress on this challenging goal almost four in 10 38 per cent said they were not doing well or only doing somewhat well Taking all retirement readiness factors together Legg Mason finds just 40 per cent of those surveyed said they were confident in their ability to retire at the age I want to while 60 per cent were either not confident or somewhat confident The sample has average retirement plan savings of 385 000 and is close to age 58 Seventy per cent of respondents said they had a defined contribution plan holding substantial portions of their net savings Given their ambitious goals investors hopefully have considerable savings elsewhere such as significant equity in their home or other investment accounts where their asset allocation is designed to help them achieve their long term goals says Matthew Schiffman global head of marketing for Legg Mason Otherwise reaching their 2 5 million goal could be extremely challenging Apple Watch Available Soon Apple says its Apple Watch is available at Apple retail store or select department stores and boutiques The line of three smartwatches will be on view and available for presale at Apple retail stores in several countries beginning April 10 and can be bought on April 24 Apple stores will have designated display cases to show all of the different ways people can customize the smartwatch with different bands and faces The company will also sell the watches in department stores and boutiques The devices will also be available on Apple s online store The entry level model the aluminum and glass Apple Watch Sport with a plastic band starts at 349 The mid range stainless steel cased watches range from 549 to 1 099 depending on the type of band customers choose The 18 karat gold Apple Watch Edition will go for a starting price of 10 000 The devices must be paired with an iPhone and are compatible with the iPhone 5 5C 5S 6 and 6 Plus The smartwatches will launch in more than a half dozen countries including the U S the UK Australia and China JW Marriott Named Turkey s Best The JW Marriott Hotel Ankara was named Turkey s best luxury business hotel during the World Luxury Hotel Awards In addition the hotel s Karma Spa Wellness and Fitness Club was recognized as Europe s best luxury fitness spa The JW Marriott offers amenities such as the spa 24 hour room service a variety of guest rooms and suites and a lineup of six venues that includes a JW Steakhouse and the Skye Vue Lounge The spa offers signature treatments and traditional massages along with skin care programs and therapies designed to make patrons feel revived and purified Hotel guests have full access to the spa and the fitness centre offers indoor and outdoor pools a large whirlpool state of the art exercise equipment and a variety of classes Personal spa services including massages therapies and facial and body treatments are available for a fee Wall Street Leaders Need To Walk The Talk Leaders of all Wall Street institutions need to spend more time talking about how to best serve their customers and walk the talk when it comes to placing the customer s interest first says Winthrop H Smith a former executive vice president of Merrill Lynch Co In the article Bring Main Street Back To Wall Street at the Private Wealth Canada website he says there needs to be a return to the revolutionary approach to investing that Merrill Lynch Pierce Fenner Beane created in the 1940s which brought a belief that capital markets could be democratized and that Wall Street could be brought to Main Street Hedge Fund Industry Transforming The hedge fund industry is transforming with managers increasingly focused on customized products and solutions new investors and emerging markets says a report by KPMG International the Managed Funds Association MFA and the Alternative Investment Management Association AIMA Growing Up A New Environment for Hedge Funds found a majority of hedge fund managers expect a significant shift in their primary sources of capital to pension funds over the next five years almost 70 per cent of managers said they offer or plan to offer custom investment solutions and more than two thirds of managers anticipate using specialized fee structures to attract investment The report finds further evidence that the growth of the hedge fund industry is being driven today largely by institutional investors rather than individuals Most say that pension funds both corporate and public would be their primary sources of capital by 2020 Forty six per cent of managers said that over the next five years they would either alter their fund strategy or launch new products to attract capital from pension funds It also shows regulation is seen as the biggest threat to the growth of the hedge fund industry as cited by more than three quarters of managers Private Equity Returns Remain Positive Returns on U S private equity and venture capital funds based in the U S remained positive in the quarter ending September 30 2014 though both were down from their second quarter results says Cambridge Associates Venture capital benefitting from a healthy IPO market outperformed private equity in the third quarter while both outpaced key public market indices Its U S private equity index rose 1 7 per cent in the quarter Over the same period the U S venture capital index was up 2 4 per cent For comparison the S P 500 was up 1 1 per cent The third quarter marked the ninth consecutive quarter of positive returns for the private equity benchmarks and the 12th consecutive quarter for venture capital Economic Forecast Downgraded RBC Economics downgraded its forecast for the Canadian economy in 2015 after a sharp drop in energy prices The RBC Economic Outlook says Canada s real GDP is projected to grow by 2 4 per cent this year a reduction of 0 3 percentage points from the forecast issued in December RBC notes that while the drop in energy prices is clearly a negative for Canada s oil and gas sector much of the weakening will be offset by strength in consumer spending and exports RBC says that exports will provide a lifeline to Canada s economy this year after a strong performance in 2014 when volume increased by 5 4 per cent the best showing in four years March 9 2015 Sustainable Investing Gaining Momentum Most active retail investors expect to see the trend to more environmentally conscious investing continue in the next few years says a survey by Morgan Stanley Institute for Sustainable Investing The report says that 71 per cent of active individual investors describe themselves as interested in sustainable investing and 65 per cent believe sustainable investing will become more prevalent over the next five years The survey also finds that the millennial generation and women are leading the way Millennials are most open to the idea of sustainable investing compared with generation X and the baby boom generation They are twice as likely to invest in companies or funds that target specific social environmental outcomes and divest because of objectionable corporate activity Additionally 76 per cent of women report an interest in sustainable investing compared to 62 per cent of men Female investors are nearly twice as likely as male investors to consider rate of return as well as the impact of their investment when making an investment decision Companies Take On Divesting Strategies Divestments will be a core component of companies capital strategy in the next year as management teams address pressure to improve portfolio performance and shareholder returns says EY s Global Corporate Divestment Study Closing the deal strategies to increase speed and value The report says more than half of executives 54 per cent expect the number of strategic sellers to increase in the next year Given the potential benefits of divesting assets 47 per cent of companies say that even if they weren t looking to divest they would be willing to sell at a premium in the range of 10 to 20 per cent and a third would go below 10 per cent The report says for many companies divestment is a key path to achieving growth and 74 per cent of respondents used funds from their most recent divestment for growth Specifically 34 per cent reinvested the funds back into the core business 23 per cent invested in new products markets or geographies and 17 per cent made an acquisition The financial benefits of divestments are undeniable considering 66 per cent of companies saw an increased valuation multiple in the remaining business after their last asset sale Canadians Make Forbes Billionaire List Thirty Canadians are on Forbes annual list of world billionaires Media magnate and Thomson Reuters chairman David Thomson continued as Canada s dominant billionaire for 2015 His overall net worth was placed at more than 25 billion Globally he is the 25th richest man on earth Next is retail and grocery giant Galen Weston whose family fortune is more than 9 billion according to Forbes He is the 131st richest man on the global list Jim Pattison founder chairman and CEO of the Jim Pattison Group is the third Canadian on the list His fortune of 7 5 billion made him snag the 177th spot on the global list James Irving owner of his self named conglomerate was Canada s fourth billionaire and the world s 216th with a net worth of 6 5 billion Canada s fifth billionaire was Joseph Tsai Alibaba Group s vice chairman Forbes saw him move up four spots from 2014 after the eCommerce company started trading in the U S Worth more than 5 billion Tsai is the world s 248th richest man Rounding out Canada

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-04-02 (2016-04-26)
    Open archived version from archive



  • Private Wealth Canada News
    cost and performance or product services and returns she said it is about value as it forces people to have conversations about value Thoughtful and strategic implementation of CRM2 will differentiate firms and reaffirm their value proposition If not done well she said it could set money in motion with clients leaving In terms of reporting however Matt Ahlstrand Advent s senior director of solutions consulting said it is all about data transactions market data calculations and account detail and where this data resides Positive Performance Predicted For Commercial Real Estate Morguard is predicting a fourth consecutive year of positive performance for Canada s commercial property sector in 2015 Investors are expected to achieve attractive returns once again driven in large part by the stability and growth in rental income Sales of commercial property will top 25 billion slightly below the 2014 total but higher than the long term average of 20 7 billion Core offerings will receive interest from pension funds institutions private capital groups and capital market groups who continue to slowly return to the market This demand will hold property values at the peak of the cycle having stabilized through much of 2014 Investment returns will be largely income driven with some investors looking increasingly to new construction as a core strategy says Keith Reading director of research at Morguard Boosting income performance will be a focus for existing portfolios Investors have already shown a willingness to move up the risk ladder in sourcing value add opportunities to achieve their investment objectives Private Equity Becoming More Liquid A sizable share of private equity investors believe the asset class has become more liquid but few believe the advances are sufficient to meet current needs says an SEI survey Solving the Private Equity Liquidity Challenge a Work in Progress shows nearly half 47 per cent of general partners GPs 36 per cent of limited partners LPs and 33 per cent of consultants agreed that the private equity market is more liquid than it used to be and will continue to become more so Still only 22 per cent of GPs 19 per cent of LPs and 17 per cent of consultants said the industry s liquidity needs are currently being met It says the growing secondary market for private equity investments has played a major role in the easing of liquidity constraints Once associated with the sale of troubled assets at deep discounts the secondary market has become mainstream with 2014 global transaction volume expected to surpass 30 billion Fifty eight per cent of LPs and investors in the survey said they have bought or sold assets on the secondary market and a majority of all respondents said participating in the secondary market is no longer taboo for investment professionals Fund Objectives Changing Russell Investments Canada Limited Russell has proposed changes to the investment objectives of its Smaller Companies Pool and Smaller Companies Class It is seeking to approve a change to allow each of the funds to provide long term capital appreciation principally through exposure to both global and Canadian equity securities of issuers with a smaller market capitalization It also wants to change the names of the funds to Russell Global Smaller Companies Pool and Russell Global Smaller Companies Class which reflects the change in investment objectives If the change is approved by investors the funds will have the ability to invest primarily in shares of foreign companies using the following styles market oriented value growth and small capitalization Salary Projections Lowered Against a backdrop of falling oil prices and regional economic uncertainty many Canadian organizations have lowered their projections for 2015 salary increases says the Conference Board of Canada s Mid Year Pulse Check of its annual compensation planning outlook survey The average base salary increases for non unionized workers is now expected to be 2 7 per cent down from the projected 2 9 per cent in the summer of 2014 Many organizations are waiting to see how the economy fares before finalizing plans It is likely that we will see further reductions in salary increases including pay freezes from organizations in Alberta and Saskatchewan Energy companies are scaling back on their capital investments and this is affecting contingent workforce needs and pay decisions says Ian Cullwick vice president leadership and human resources research The next few months will be challenging for employers as they balance the need to retain top talent with affordability iShares Adds Funds iShares has launched four funds in the iShares Core providing more exposures and currency hedging optionality to the asset classes In addition iShares has also added a fund that provides an unhedged option to dividend paying U S companies The new funds provide additional options for investors including the U S total stock market and all world access CFOs Show Modest Optimism Retail chief financial officers are looking to 2015 with modest optimism predicting a 3 9 per cent increase in total sales and 3 7 per cent increase in comparable store sales in the year ahead says a BDO USA LLP survey This is about one percentage point lower than 2014 s bullish projections Still nearly two in three retailers expect comparable store sales to increase and with 71 per cent of retailers including online sales in their comparable store sales reports analysts say a considerable amount of this 2015 growth may come from further eCommerce sales which grew 16 per cent in 2014 February 9 2015 CFO Role Changing The role of the chief financial officer has changed dramatically says a report by Odgers Berndtson Developing the CFO of the Future The Changing Role of Finance Executives in Leading Canadian Companies says to succeed CFOs need to serve as true business partners to the senior team in driving value and growth while playing the role of the skeptical optimist in the boardroom Companies are looking for CFOs that demonstrate strong business acumen but the key to building this skill from within is to involve finance leaders in decision making early on says Odgers Berndtson While the majority of CFOs require incredible technical expertise these skills alone do not equip them to be successful says Hugh Arnold adjunct professor of organizational behaviour and HR management at the Rotman School of Management Only 20 per cent of the success of a CFO stems from having strong financial skills The remaining 80 per cent is a result of leadership skills The report also says that executives with finance leadership experience are increasingly moving into the president role In 2004 only 14 per cent of CEOs had served in an executive position within finance but by 2014 that number had risen to 22 per cent Contrary to general perceptions of control oriented executives the report found that leading global CFOs are strong relationship builders who aren t afraid to step into the limelight and who place a premium on innovation and new business thinking Emerging Markets To Dominate Luxury Goods Market The value of the global luxury market was US 296 1 billion in 2013 and is expected to reach US 374 85 billion in 2020 growing at a compound annual growth rate CAGR of 3 4 per cent from 2014 to 2020 says a report by Transparency Market Research Global Luxury Goods Market Industry Analysis Size Share Growth Trends and Forecast 2014 2020 says Europe was the largest market for global luxury goods in 2013 due to substantial sales through travel retail and duty free shops As of 2013 North America was the second largest market for global luxury goods The global luxury goods market is driven by under penetrated emerging markets of Asia Pacific and rest of the world The luxury goods market demonstrated high growth for the period 2009 2012 but growth slowed down in 2013 Growth is expected to be moderate in 2014 and emerging markets such as the UAE Saudi Arabia Egypt Singapore Malaysia Thailand India Brazil South Africa Vietnam and Indonesia are expected to drive growth during the forecast period 2014 to 2020 The North American market is witnessing decent growth for absolute luxury goods in contrast to Europe where per capita expenditure on luxury goods has decreased The report says most luxury goods companies are currently focusing on emerging markets as these are scarcely penetrated though consumers have both knowledge of luxury items and buying power for the same Super Rich Invest In Real Estate The world s super rich own around 3 trillion worth of owner occupied residential properties more than the gross domestic product of the UK France or India says a report by Wealth X and Sotheby s International Realty The report says there are 211 275 ultra high net worth individuals defined as those with 30 million and above in net assets around the world and nearly 80 per cent of them own two or more residences that they bought for their own personal use rather than purely for an investment The total value of their homes rose by eight per cent during 2014 In addition ultra high net worth individuals keep their primary residences for an average of over 15 years and their secondary residences for over 10 years while billionaires change their properties once every three years Ultra high net worth individuals generally hold around 30 per cent of their wealth in property says a separate 2014 Wealth Report by independent property consultancy Knight Frank Almost three quarters of these individuals own a townhouse while just under 30 per cent own a rural retreat Mercedes Benz Sales Up A total of 2 495 Mercedes Benz Sprinter and smart units were delivered to customers in January This represents the best January on record for Mercedes Benz Canada and an overall sales increase of 9 5 per cent or 217 units compared to January 2014 A total of 2 154 Mercedes Benz passenger cars and luxury light trucks were retailed in January which translates into an 8 1 per cent gain for the month Passenger car sales totaled 1 145 units in January The newest model the C Class accounted for almost 50 per cent of the month s sales A total of 1 009 luxury light trucks were sold for the month This represents an increase of 46 per cent compared to 2014 sales figures and was fueled by particularly buoyant M Class GLA and GLK Class sales The Mercedes Benz pre owned division also recorded an excellent start to the year with 870 vehicles delivered for the month This is an increase of 71 units or 8 9 per cent compared to the same time period last year Active Environment Continues To Improve The active management environment continued to improve throughout 2014 with 65 per cent of Canadian large cap managers beating the S P TSX Composite Index in the fourth quarter says Russell Investments Canada Limited s Active Manager Report This completes a straight line progression 53 per cent in the third quarter 41 per cent in the second and 31 per cent in the first quarter Using annual returns 55 per cent of large cap managers beat the benchmark in 2014 down from 94 per cent in 2013 the best year since 2001 The median manager return was 11 3 per cent in 2014 ahead of the S P TSX Composite Index return of 10 6 per cent It is worth noting that 2014 was the fourth consecutive year that the median large cap manager return exceeded the benchmark During those four years 69 per cent of large cap managers outperformed the benchmark on average says Kathleen Wylie head of Canadian equity research at Russell Canada There are certainly periods that have been more challenging for active managers such as 2009 and 2010 but our data shows that skilled active managers can add value over the long run contrary to what is often reported in the press Algonquin Launches Debt Strategies Fund Algonquin Capital Corporation has launched a debt strategies fund The fund offers investors access to fixed income strategies designed to overcome the challenges of today s markets The current interest rate environment poses significant obstacles for traditional fixed income products says Brian D Costa president of Algonquin Capital We believe the low level of interest rates will make it difficult to generate adequate returns while an increase in rates could lead to material losses Our fund aims to provide investors with an opportunity to profit from both rising and falling interest rate environments The fund s objective is to generate absolute returns with a low correlation to both interest rates and equity markets It seeks to achieve this by separating fixed income instruments into their two main components interest rate and credit return and actively managing each independently Managers See Asset Growth Investment managers have seen significantly stronger growth in assets under management and revenue despite lingering pressure from investors to lower fees says an Advent Users Group report The group an independent organization of investment professionals who use solutions from Advent Software found survey participants reported median asset growth of 19 4 per cent in 2013 compared to a median asset growth of 9 5 per cent in 2012 The average survey participant achieved revenue growth in 2013 with median revenues rising by 14 6 per cent from the previous year It also found approximately 16 per cent of firms surveyed plan to add new asset classes within the next year with many planning to add alternative strategies to portfolios Spending on technology and operations continues to rise with firms expecting IT and operations costs to rise an average of 11 5 per cent in 2014 from a year earlier Most firms experienced overall client turnover of between one per cent and 10 per cent However more than four out of five respondents reported a net increase in the number of clients serviced by their firms Private Equity Activity Up Private equity activity was up in 2014 with 296 private equity deals with 41 2 billion invested says the Canadian Venture Capital Private Equity Association s CVCA 2014 VC and PE Market Activity report The strong results are expected to continue in 2015 as a vast majority 77 per cent believe current economic conditions favour the private capital industry Notably almost two thirds 61 per cent believe that depressed oil prices improve their business outlook for this year Eighty per cent believe IPO activity will remain the same or decrease 44 per cent and 36 per cent respectively while 86 per cent believe M A activity will remain the same or increase evenly split Real Estate Returns Slip With returns of 7 3 per cent for 2014 Canadian real estate appears to be slowing after five strong years says Simon Fairchild executive director of MSCI He revealed results of the REALpac IPD Canada Quarterly Property Index Last year s return was down from the 11 per cent of 2011 and ended a five year string where Canada was a global leader in the category Still the 10 year return is 11 4 per cent Of the return in 2014 5 2 per cent came from income return and 1 9 per cent was from capital growth Net inflows were 5 5 billion with retail and offices getting the lion s share and Toronto ON receiving about half of the inflow However Stephen Taylor vice president real estate at HOOPP doesn t see anyone cutting back on real estate However they may have to look outside Canada as even in the secondary markets here prices have been bid up reducing the opportunities More Women Needed On Boards Two out of five 41 per cent attendees at the CFA Society Toronto s conference Getting to Alpha The Competitive Advantage of Gender Diversity believe that women should hold 50 per cent of board seats in Canada by 2020 compared with the 20 8 per cent women on board representation Canada sees today Another 59 per cent feel that female representation should increase to 40 to 45 per cent of board seats Keynotes and panelists at the session emphasized gender diversity as a means to achieve optimal financial results Over 50 per cent of attendees felt that conscious or unconscious bias is the biggest hurdle preventing gender balance at the top level while 23 per cent believe traditional job structures and lack of flexibility in performing roles are to blame Another 13 per cent felt the barrier is caused by women not stepping forward into leadership roles Women in leadership is progressing from conversational theory to an applied competitive strategy Those who don t embrace this business imperative will be left behind says Sue Lemon CEO of CFA Society Toronto Foreign Stocks Post Healthy Gains Mutual funds in Canada that invest in foreign stocks posted healthy gains in January in large part because of the Canadian dollar s sharp drop against most major world currencies says Morningstar Canada data The falling loonie was also indirectly responsible for the strong results of fixed income funds during the month Thirty seven of its 42 Canada fund indices increased for the month of January Among the best performers were the indices that track fund returns in the Asia Pacific ex Japan equity Greater China equity and Asia Pacific equity categories which increased by 12 per cent 10 6 per cent and 10 3 per cent respectively Funds in the U S equity category collectively increased by 3 8 per cent And a Bank of Canada interest rate cut resulted in strong positive results in fixed income categories in January The Canadian long term fixed income and Canadian inflation protected fixed income fund indices increased by 8 3 per cent and 7 3 per cent respectively MSCU Offering Impact Product Mennonite Savings and Credit Union MSCU and Oikocredit Canada have teamed up to launch the Oikocredit Global Impact GIC Investors in Ontario will be able to invest in a guaranteed RSP eligible investment aimed at lifting people out of poverty

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-03-02 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    cost and performance or product services and returns she said it is about value as it forces people to have conversations about value Thoughtful and strategic implementation of CRM2 will differentiate firms and reaffirm their value proposition If not done well she said it could set money in motion with clients leaving In terms of reporting however Matt Ahlstrand Advent s senior director of solutions consulting said it is all about data transactions market data calculations and account detail and where this data resides Positive Performance Predicted For Commercial Real Estate Morguard is predicting a fourth consecutive year of positive performance for Canada s commercial property sector in 2015 Investors are expected to achieve attractive returns once again driven in large part by the stability and growth in rental income Sales of commercial property will top 25 billion slightly below the 2014 total but higher than the long term average of 20 7 billion Core offerings will receive interest from pension funds institutions private capital groups and capital market groups who continue to slowly return to the market This demand will hold property values at the peak of the cycle having stabilized through much of 2014 Investment returns will be largely income driven with some investors looking increasingly to new construction as a core strategy says Keith Reading director of research at Morguard Boosting income performance will be a focus for existing portfolios Investors have already shown a willingness to move up the risk ladder in sourcing value add opportunities to achieve their investment objectives Private Equity Becoming More Liquid A sizable share of private equity investors believe the asset class has become more liquid but few believe the advances are sufficient to meet current needs says an SEI survey Solving the Private Equity Liquidity Challenge a Work in Progress shows nearly half 47 per cent of general partners GPs 36 per cent of limited partners LPs and 33 per cent of consultants agreed that the private equity market is more liquid than it used to be and will continue to become more so Still only 22 per cent of GPs 19 per cent of LPs and 17 per cent of consultants said the industry s liquidity needs are currently being met It says the growing secondary market for private equity investments has played a major role in the easing of liquidity constraints Once associated with the sale of troubled assets at deep discounts the secondary market has become mainstream with 2014 global transaction volume expected to surpass 30 billion Fifty eight per cent of LPs and investors in the survey said they have bought or sold assets on the secondary market and a majority of all respondents said participating in the secondary market is no longer taboo for investment professionals Fund Objectives Changing Russell Investments Canada Limited Russell has proposed changes to the investment objectives of its Smaller Companies Pool and Smaller Companies Class It is seeking to approve a change to allow each of the funds to provide long term capital appreciation principally through exposure to both global and Canadian equity securities of issuers with a smaller market capitalization It also wants to change the names of the funds to Russell Global Smaller Companies Pool and Russell Global Smaller Companies Class which reflects the change in investment objectives If the change is approved by investors the funds will have the ability to invest primarily in shares of foreign companies using the following styles market oriented value growth and small capitalization Salary Projections Lowered Against a backdrop of falling oil prices and regional economic uncertainty many Canadian organizations have lowered their projections for 2015 salary increases says the Conference Board of Canada s Mid Year Pulse Check of its annual compensation planning outlook survey The average base salary increases for non unionized workers is now expected to be 2 7 per cent down from the projected 2 9 per cent in the summer of 2014 Many organizations are waiting to see how the economy fares before finalizing plans It is likely that we will see further reductions in salary increases including pay freezes from organizations in Alberta and Saskatchewan Energy companies are scaling back on their capital investments and this is affecting contingent workforce needs and pay decisions says Ian Cullwick vice president leadership and human resources research The next few months will be challenging for employers as they balance the need to retain top talent with affordability iShares Adds Funds iShares has launched four funds in the iShares Core providing more exposures and currency hedging optionality to the asset classes In addition iShares has also added a fund that provides an unhedged option to dividend paying U S companies The new funds provide additional options for investors including the U S total stock market and all world access CFOs Show Modest Optimism Retail chief financial officers are looking to 2015 with modest optimism predicting a 3 9 per cent increase in total sales and 3 7 per cent increase in comparable store sales in the year ahead says a BDO USA LLP survey This is about one percentage point lower than 2014 s bullish projections Still nearly two in three retailers expect comparable store sales to increase and with 71 per cent of retailers including online sales in their comparable store sales reports analysts say a considerable amount of this 2015 growth may come from further eCommerce sales which grew 16 per cent in 2014 February 9 2015 CFO Role Changing The role of the chief financial officer has changed dramatically says a report by Odgers Berndtson Developing the CFO of the Future The Changing Role of Finance Executives in Leading Canadian Companies says to succeed CFOs need to serve as true business partners to the senior team in driving value and growth while playing the role of the skeptical optimist in the boardroom Companies are looking for CFOs that demonstrate strong business acumen but the key to building this skill from within is to involve finance leaders in decision making early on says Odgers Berndtson While the majority of CFOs require incredible technical expertise these skills alone do not equip them to be successful says Hugh Arnold adjunct professor of organizational behaviour and HR management at the Rotman School of Management Only 20 per cent of the success of a CFO stems from having strong financial skills The remaining 80 per cent is a result of leadership skills The report also says that executives with finance leadership experience are increasingly moving into the president role In 2004 only 14 per cent of CEOs had served in an executive position within finance but by 2014 that number had risen to 22 per cent Contrary to general perceptions of control oriented executives the report found that leading global CFOs are strong relationship builders who aren t afraid to step into the limelight and who place a premium on innovation and new business thinking Emerging Markets To Dominate Luxury Goods Market The value of the global luxury market was US 296 1 billion in 2013 and is expected to reach US 374 85 billion in 2020 growing at a compound annual growth rate CAGR of 3 4 per cent from 2014 to 2020 says a report by Transparency Market Research Global Luxury Goods Market Industry Analysis Size Share Growth Trends and Forecast 2014 2020 says Europe was the largest market for global luxury goods in 2013 due to substantial sales through travel retail and duty free shops As of 2013 North America was the second largest market for global luxury goods The global luxury goods market is driven by under penetrated emerging markets of Asia Pacific and rest of the world The luxury goods market demonstrated high growth for the period 2009 2012 but growth slowed down in 2013 Growth is expected to be moderate in 2014 and emerging markets such as the UAE Saudi Arabia Egypt Singapore Malaysia Thailand India Brazil South Africa Vietnam and Indonesia are expected to drive growth during the forecast period 2014 to 2020 The North American market is witnessing decent growth for absolute luxury goods in contrast to Europe where per capita expenditure on luxury goods has decreased The report says most luxury goods companies are currently focusing on emerging markets as these are scarcely penetrated though consumers have both knowledge of luxury items and buying power for the same Super Rich Invest In Real Estate The world s super rich own around 3 trillion worth of owner occupied residential properties more than the gross domestic product of the UK France or India says a report by Wealth X and Sotheby s International Realty The report says there are 211 275 ultra high net worth individuals defined as those with 30 million and above in net assets around the world and nearly 80 per cent of them own two or more residences that they bought for their own personal use rather than purely for an investment The total value of their homes rose by eight per cent during 2014 In addition ultra high net worth individuals keep their primary residences for an average of over 15 years and their secondary residences for over 10 years while billionaires change their properties once every three years Ultra high net worth individuals generally hold around 30 per cent of their wealth in property says a separate 2014 Wealth Report by independent property consultancy Knight Frank Almost three quarters of these individuals own a townhouse while just under 30 per cent own a rural retreat Mercedes Benz Sales Up A total of 2 495 Mercedes Benz Sprinter and smart units were delivered to customers in January This represents the best January on record for Mercedes Benz Canada and an overall sales increase of 9 5 per cent or 217 units compared to January 2014 A total of 2 154 Mercedes Benz passenger cars and luxury light trucks were retailed in January which translates into an 8 1 per cent gain for the month Passenger car sales totaled 1 145 units in January The newest model the C Class accounted for almost 50 per cent of the month s sales A total of 1 009 luxury light trucks were sold for the month This represents an increase of 46 per cent compared to 2014 sales figures and was fueled by particularly buoyant M Class GLA and GLK Class sales The Mercedes Benz pre owned division also recorded an excellent start to the year with 870 vehicles delivered for the month This is an increase of 71 units or 8 9 per cent compared to the same time period last year Active Environment Continues To Improve The active management environment continued to improve throughout 2014 with 65 per cent of Canadian large cap managers beating the S P TSX Composite Index in the fourth quarter says Russell Investments Canada Limited s Active Manager Report This completes a straight line progression 53 per cent in the third quarter 41 per cent in the second and 31 per cent in the first quarter Using annual returns 55 per cent of large cap managers beat the benchmark in 2014 down from 94 per cent in 2013 the best year since 2001 The median manager return was 11 3 per cent in 2014 ahead of the S P TSX Composite Index return of 10 6 per cent It is worth noting that 2014 was the fourth consecutive year that the median large cap manager return exceeded the benchmark During those four years 69 per cent of large cap managers outperformed the benchmark on average says Kathleen Wylie head of Canadian equity research at Russell Canada There are certainly periods that have been more challenging for active managers such as 2009 and 2010 but our data shows that skilled active managers can add value over the long run contrary to what is often reported in the press Algonquin Launches Debt Strategies Fund Algonquin Capital Corporation has launched a debt strategies fund The fund offers investors access to fixed income strategies designed to overcome the challenges of today s markets The current interest rate environment poses significant obstacles for traditional fixed income products says Brian D Costa president of Algonquin Capital We believe the low level of interest rates will make it difficult to generate adequate returns while an increase in rates could lead to material losses Our fund aims to provide investors with an opportunity to profit from both rising and falling interest rate environments The fund s objective is to generate absolute returns with a low correlation to both interest rates and equity markets It seeks to achieve this by separating fixed income instruments into their two main components interest rate and credit return and actively managing each independently Managers See Asset Growth Investment managers have seen significantly stronger growth in assets under management and revenue despite lingering pressure from investors to lower fees says an Advent Users Group report The group an independent organization of investment professionals who use solutions from Advent Software found survey participants reported median asset growth of 19 4 per cent in 2013 compared to a median asset growth of 9 5 per cent in 2012 The average survey participant achieved revenue growth in 2013 with median revenues rising by 14 6 per cent from the previous year It also found approximately 16 per cent of firms surveyed plan to add new asset classes within the next year with many planning to add alternative strategies to portfolios Spending on technology and operations continues to rise with firms expecting IT and operations costs to rise an average of 11 5 per cent in 2014 from a year earlier Most firms experienced overall client turnover of between one per cent and 10 per cent However more than four out of five respondents reported a net increase in the number of clients serviced by their firms Private Equity Activity Up Private equity activity was up in 2014 with 296 private equity deals with 41 2 billion invested says the Canadian Venture Capital Private Equity Association s CVCA 2014 VC and PE Market Activity report The strong results are expected to continue in 2015 as a vast majority 77 per cent believe current economic conditions favour the private capital industry Notably almost two thirds 61 per cent believe that depressed oil prices improve their business outlook for this year Eighty per cent believe IPO activity will remain the same or decrease 44 per cent and 36 per cent respectively while 86 per cent believe M A activity will remain the same or increase evenly split Real Estate Returns Slip With returns of 7 3 per cent for 2014 Canadian real estate appears to be slowing after five strong years says Simon Fairchild executive director of MSCI He revealed results of the REALpac IPD Canada Quarterly Property Index Last year s return was down from the 11 per cent of 2011 and ended a five year string where Canada was a global leader in the category Still the 10 year return is 11 4 per cent Of the return in 2014 5 2 per cent came from income return and 1 9 per cent was from capital growth Net inflows were 5 5 billion with retail and offices getting the lion s share and Toronto ON receiving about half of the inflow However Stephen Taylor vice president real estate at HOOPP doesn t see anyone cutting back on real estate However they may have to look outside Canada as even in the secondary markets here prices have been bid up reducing the opportunities More Women Needed On Boards Two out of five 41 per cent attendees at the CFA Society Toronto s conference Getting to Alpha The Competitive Advantage of Gender Diversity believe that women should hold 50 per cent of board seats in Canada by 2020 compared with the 20 8 per cent women on board representation Canada sees today Another 59 per cent feel that female representation should increase to 40 to 45 per cent of board seats Keynotes and panelists at the session emphasized gender diversity as a means to achieve optimal financial results Over 50 per cent of attendees felt that conscious or unconscious bias is the biggest hurdle preventing gender balance at the top level while 23 per cent believe traditional job structures and lack of flexibility in performing roles are to blame Another 13 per cent felt the barrier is caused by women not stepping forward into leadership roles Women in leadership is progressing from conversational theory to an applied competitive strategy Those who don t embrace this business imperative will be left behind says Sue Lemon CEO of CFA Society Toronto Foreign Stocks Post Healthy Gains Mutual funds in Canada that invest in foreign stocks posted healthy gains in January in large part because of the Canadian dollar s sharp drop against most major world currencies says Morningstar Canada data The falling loonie was also indirectly responsible for the strong results of fixed income funds during the month Thirty seven of its 42 Canada fund indices increased for the month of January Among the best performers were the indices that track fund returns in the Asia Pacific ex Japan equity Greater China equity and Asia Pacific equity categories which increased by 12 per cent 10 6 per cent and 10 3 per cent respectively Funds in the U S equity category collectively increased by 3 8 per cent And a Bank of Canada interest rate cut resulted in strong positive results in fixed income categories in January The Canadian long term fixed income and Canadian inflation protected fixed income fund indices increased by 8 3 per cent and 7 3 per cent respectively MSCU Offering Impact Product Mennonite Savings and Credit Union MSCU and Oikocredit Canada have teamed up to launch the Oikocredit Global Impact GIC Investors in Ontario will be able to invest in a guaranteed RSP eligible investment aimed at lifting people out of poverty

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-03-03 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    that the wealth gap poses a risk to the financial system in North America It is clear bankers are concerned about the wealth gap says Dr Andrew Jennings FICO s chief analytics officer It is a macro economic issue that can have a profound effect on the quality accessibility and risk associated with consumer credit Concern among bankers about the risk posed by the wealth gap increased by 12 percentage points over its last survey Investors Take Wrong Approach Investors putting their faith in financial market forecasts are taking the wrong approach says Craig Bodenstab of Orbis Investment Management In the session The Perils of Forecasting at the 2015 CPBI Investment Trends session he said most forecasters are merely confirming the present The reason for this is that unlike sciences or math where the knowledge is cumulative and true whether used now or in the future economics is cyclical and influenced by human behaviour In most cases studies of the forecasting records of economists and financial market participants shows they tend to be optimistic and never call for a decline in markets or assets More reliable he said is factors that the investor can control One area where investors can expect better return is by watching the cost of assets There is a correlation between the price paid and the return on investment with the lowest quartile priced stocks having the best returns he said Business Regulation Costs On Rise The total cost of regulation to Canadian businesses has grown to 37 1 billion up from 31 7 billion in 2012 says Canada s Red Tape Report by the Canadian Federation of Independent Business CFIB In terms of time businesses spent an average of 842 hours a year complying with government rules and paperwork in 2014 That figure was up 12 per cent from 2012 The report says 42 per cent of small business owners would not advise their children to start a business given the burden of regulation Not all regulation is red tape but business owners say that regulation could be cut by about 30 per cent or 11 billion a year with no negative effect on important health safety and environmental objectives of regulation The savings would translate to 4 5 hours a week of extra time for the average business The study also found that regulation costs Canadian small businesses significantly more than their U S counterparts The largest cost difference between the two countries was found in businesses with fewer than five employees Businesses of this size pay 58 per cent more per employee in Canada 6 683 than in the U S 4 240 CAN Specialty Offers Products In Canada CAN s 2 9 billion specialty lines business which offers professional and management liability financial and other specialized property and casualty insurance products and services now offers specialty products in Canada CNA Specialty will begin accepting submissions for management liability and professional liability Coverage options are available for healthcare directors and officers liability technology and telecommunications liability employment practices liability fiduciary liability crime and miscellaneous professional liability January 19 2015 Income Tax Cuts Could Provide Relief Large scale personal income tax cuts could provide relief for working Canadians and lay the foundation for long term economic growth says a study released by the Fraser Institute Reforming Federal Personal Income Taxes A Pro Growth Plan for Canada says Ottawa could eliminate many tax credits deductions and other tax breaks broadly known as tax expenditures which would free up 20 billion This combined with expected surpluses in the future would allow the government to eliminate Canada s two middle income tax rates 22 and 26 per cent and create a new tax landscape with just two personal income tax rates 15 per cent for almost all Canadians and 29 per cent for top earners roughly two per cent of tax filers Eliminating the middle income tax rates would mean more take home pay for middle class families and broad increases in the incentives for Canadians to work save invest and engage in entrepreneurship says Charles Lammam study co author and associate director of tax and fiscal policy at the Fraser Institute Moreover eliminating or curtailing the myriad tax credits and deductions would also simplify the tax system reducing the cost of complying with the tax code accountants tax filing software etc for Canadians Cruise Offers Super Luxury Suite A luxury cruise ship debuting in 2016 will have one of the largest and most expensive suites ever offered at sea Regent Seven Seas will charge 5 000 a night per person for a luxury suite the size of a house with 3 875 square feet of space 360 square meters onboard its Regent Seven Seas Explorer ship The suite will include a grand piano two bedrooms views from three sides of the ship and a personal spa retreat with a private sauna steam room and treatment area It s designed for a minimum of two people and maximum four The Explorer is expected to launch in July 2016 The ship will spend its first season in Europe and the first of its 11 sailings will be from Monte Carlo Monaco to Venice Italy It will carry 750 guests This is Regent s first new ship since 2003 though the cruise line has just completed a 150 million refurbishment of its other three vessels All fares on the ship include dining shore excursions and tips However the price of the Regent Suite also includes unlimited spa treatments laundry services a private car with driver and guide for port calls an onboard on call butler and limousine transportation to and from the ship The new ship is part of a trend in which cruise lines are replicating resort like experiences with ships that feel like high end luxury small resorts where travelers barely feel like they re at sea Oil Prices Threaten Economy Canada s economy is being threatened by lower oil prices which have resulted from an over abundance of U S oil and Saudi Arabia s willingness to keep prices down to drive high cost producers of the market says David Wolf a portfolio manager and co manager of the Fidelity Canadian Asset Allocation Fund Fidelity Monthly Income Fund Fidelity Dividend Fund Fidelity Income Allocation Fund and Fidelity Conservative Income Private Pool In the article Canada s Oil Slick at the Private Wealth Canada website he says higher commodity prices oil prices in particular have set in motion a number of virtuous circles in Canada over the past decade or so Now however those virtuous circles could turn vicious for Canada Listing Requirements Proposed For ETFs The Toronto Stock Exchange wants to introduce listing requirements for non corporate issuers such as exchange traded funds ETFs closed end funds and structured products It has published a set of proposed rule amendments for comment in response to the growth in the number of ETF providers in recent years While structured products aren t typically listed on exchanges it says that there may be benefits to such public listings so it s proposing a set of rules devoted to listing these vehicles as well The different listing standards for different types of products reflect the fundamental differences in the trading liquidity and ability to raise additional funds for each category Too Much Focus On REIT Yields When it comes to REITs investors are too focused on yield says Blair Welch a partner at Slate Asset Management However it is not just about yield he told the RealPac and Goodmans LLP session NextGen REITS A 360 Degree Look at Recent Future Trends As part of a panel discussion he said investors need to treat real estate as if they own it Stephen Pincus a partner at Goodmans noted that REITs in Canada are only about 20 years old Changes in the REIT structure sector hit their stride in the mid 90s and since then the Canadian market has been particularly stable It has come back fast after financial blips and in fact rebounded faster after the 2008 financial crisis than the U S did However it is heading toward being a mature market and with that the source of capital is changing Michael Emory president and CEO of the Allied Properties REIT said the best way to grow is to perform When Canadian REITs were outperforming early in this decade global money found them However when other REITs started doing better than Canada the global dollars moved there Energy Needs Paint Fuller Picture While the rout in oil has sharpened the focus on economic fallout Canada tops the list as the largest consumer of energy per capita among the Organisation for Economic Cooperation and Development countries meaning that trends in the energy needs of consumers and industries alike paint a fuller picture of the country s outlook says a report from CIBC World Markets The dramatic collapse in crude has lines drawn between winners and losers says Benjamin Tal CIBC deputy chief economist And though the nation s emergence as an energy powerhouse has the negatives coming into sharper focus there will be spoils to be shared in Canada Canada is not only a major energy producer but it also consumes more energy than any other major industrialized country The report points out that this level of energy consumption could have been much higher if not for the meaningful decline in the country s overall energy intensity Canada s economy uses 25 per cent less energy per unit of GDP today than it did 20 years ago but over the past decade energy intensity stabilized as energy consumption in the oil patch and manufacturing sectors virtually cancelled each other out reflecting the past decade s growth in one and downsizing in the other Canadian manufacturers meanwhile generally use electricity and natural gas rather than oil based fuels so the drop in oil prices will have very little direct impact on the cost of production the report says That said given that natural gas prices will likely remain low compared to electricity prices certain manufacturing sectors that are natural gas intensive such as chemical fertilizer producers and the forestry industry will be among the biggest winners it says Attitude Cautious Towards Economic Prospects Canada s top economists strategists and portfolio managers are cautious about Canadian economic prospects says Towers Watson s Annual Survey of Investment Perspectives Canadian GDP is expected to lag the U S by 0 5 per cent in 2015 Forecasters also expect GDP will fall to 2 1 per cent by 2019 and rise to 2 3 per cent by 2029 which is down marginally from last year In addition expectations are that the Canadian unemployment rate will improve to six per cent this year but there is less optimism about a return to par for the Canadian dollar The majority of respondents expect the Canadian dollar to trade between 85 and 92 cents U S in the short term with moderate appreciation 93 cents expected over the next few years In the current environment survey respondents do not expect the Bank of Canada to increase the bank rate until late in 2015 For the developed markets forecasters predict equity market returns of between seven per cent and eight per cent through 2019 While the decrease in oil prices has certainly cast a pall over the expectations for Canada s growth prospects especially in Alberta there is some positive news says Janet Rabovsky director of investment consulting at Towers Watson The declining Canadian dollar has given a boost to the traditional manufacturing provinces of Ontario and Quebec where economic activity has increased and unemployment levels have started to decline Given that the Canadian dollar is not expected to surge anytime soon this will certainly offset some of the impact of the decline in the price of oil Muted growth expectations add another challenge to defined benefit plan sponsors who already face a potential increase in their pension obligations due to the decline in bond yields during 2014 Combined with potentially lacklustre future equity returns this means that DB plan sponsors may not see their circumstance improved by market forces alone Tools Scrutinize Carbon related Risks Investors have started to scrutinize the carbon related risks embedded in their portfolios using a sophisticated range of tools says research from MSCI Its 2015 ESG Trends to Watch shows in addition to the measurement of companies current carbon emissions investors can now adopt a total portfolio accounting of current and future emissions measured against market benchmarks They can also access portfolio construction techniques ranging from selective exclusions to tilts of portfolio weights based on current and future carbon characteristics of individual securities However the report warns that investors can be highly exposed both positively and negatively to fundamental shifts in energy technology in the broad diversified equity and fixed income holdings that can make up the vast majority of a portfolio Without deliberately tilting more aggressively towards the companies with large and growing renewable capacity investors potentially risk being under exposed to significant growth in future fuel technology January 12 2015 Investment Leaders Optimistic Canada s investment industry leaders are optimistic about the outlook for capital markets and their individual firms in the coming years says a survey by the Investment Industry Association of Canada IIAC IIAC 2015 Capital Markets Outlook A Survey of Canada s Investment Industry CEOs says 87 per cent of CEO respondents are forecasting status quo or improved conditions for global capital markets in the year ahead while 81 per cent share this outlook for Canada s markets These results presage attractive opportunities for investors in the coming year particularly given that our surveys of investment dealer CEOs have proven remarkably accurate says Ian Russell its president and CEO In the two previous years that we have conducted this survey the predictions of cautious optimism were borne out It is reasonable to presuppose that the outcome for 2015 will confirm our findings Russell points out that the survey was undertaken before the collapse in oil prices and the related market decline but as the latest market ups and downs show the bad news of the past three months stands a good chance of being reversed Additional grounds for optimism stem from the fact that 69 per cent of investment dealer CEOs are predicting their firm s profitability will be up in 2015 a substantial increase from the 48 per cent who forecast this last year Wealthy Use Money To Build Portfolios Most affluent Americans don t sit on their wealth they use it to build their portfolios through wise investments says a study by Spectrem Group Asset Allocation Portfolios and Primary Providers says the technology sector is the most popular choice for future investment more than half for all wealth segments Sixty one per cent of millionaire investors with a net worth of 1 to 5 million say they would invest discretionary funds in technology followed by healthcare 58 per cent and pharmaceuticals 47 per cent Ownership of life insurance policies ranges from 61 per cent of mass affluent investors 100 000 to 1 million net worth to 56 per cent among ultra high net worth investors 5 to 25 million net worth Long term insurance ownership is much lower in all segments The report also says wealthy investors look to overseas investment opportunities more than investors from the less wealthy segments Investors change their investment priorities throughout their lives younger investors are more likely to take a chance on alternative investments in order to increase the diversity of their portfolio says George H Walper Jr president of Spectrem Group Switzerland More Than Chocolate And Skiing Many Canadians have regarded Switzerland as primarily a ski destination or tax haven However Switzerland has much more to offer travelers says Peter Volny In his article Switzerland More Than Chocolate And Skiing Volny describes many of the year round delightful attributes of this popular tourist destination Some of the great features of the country include its rail system great hotels breathtaking sights and fine restaurants To read more click here Mercedes Benz Beats Sales Records Mercedes Benz Canada and its national dealer network have bested a number of previously established sales records by delivering a grand total of 40 555 Mercedes Benz passenger vehicles vans and smart units throughout 2014 This total represented the best ever year end results for Mercedes Benz Canada an overall increase of 9 6 per cent or 3 537 units when compared to the company s record breaking 2013 sales results Passenger car and luxury light truck sales totaled 33 928 units for the year This is ahead by 8 2 per cent or 2 571 units A total of 19 234 passenger car sales were delivered which exceeded last year s notable sales figures by 7 8 per cent or 1 395 vehicles These numbers were not only the best sales results ever recorded in the company s history but have also put Mercedes Benz in first place among all other luxury manufacturers in Canada Models that excelled include the E Class family and S Class Sedan sales which were ahead of 2013 by 12 8 per cent and 136 1 per cent respectively Luxury Real Estate Sales Rising The market for residential real estate over 1 million in Canada s largest urban centres in 2014 showed double digit sales gains says a report by Sotheby s International Realty Canada The report also shows an upward pressure on pricing for luxury homes in the Greater Toronto Area of Ontario and Vancouver BC finished the year with positive growth in home sales over 1 million as did Calgary AB and Montreal QC The GTA led the country with a 38 per cent year over year increase in sales volume Vancouver experienced 25 per cent growth in sales while Montreal saw growth of 21 per cent Calgary had a more modest increase of 16 per cent year over

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-01-31 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    that the wealth gap poses a risk to the financial system in North America It is clear bankers are concerned about the wealth gap says Dr Andrew Jennings FICO s chief analytics officer It is a macro economic issue that can have a profound effect on the quality accessibility and risk associated with consumer credit Concern among bankers about the risk posed by the wealth gap increased by 12 percentage points over its last survey Investors Take Wrong Approach Investors putting their faith in financial market forecasts are taking the wrong approach says Craig Bodenstab of Orbis Investment Management In the session The Perils of Forecasting at the 2015 CPBI Investment Trends session he said most forecasters are merely confirming the present The reason for this is that unlike sciences or math where the knowledge is cumulative and true whether used now or in the future economics is cyclical and influenced by human behaviour In most cases studies of the forecasting records of economists and financial market participants shows they tend to be optimistic and never call for a decline in markets or assets More reliable he said is factors that the investor can control One area where investors can expect better return is by watching the cost of assets There is a correlation between the price paid and the return on investment with the lowest quartile priced stocks having the best returns he said Business Regulation Costs On Rise The total cost of regulation to Canadian businesses has grown to 37 1 billion up from 31 7 billion in 2012 says Canada s Red Tape Report by the Canadian Federation of Independent Business CFIB In terms of time businesses spent an average of 842 hours a year complying with government rules and paperwork in 2014 That figure was up 12 per cent from 2012 The report says 42 per cent of small business owners would not advise their children to start a business given the burden of regulation Not all regulation is red tape but business owners say that regulation could be cut by about 30 per cent or 11 billion a year with no negative effect on important health safety and environmental objectives of regulation The savings would translate to 4 5 hours a week of extra time for the average business The study also found that regulation costs Canadian small businesses significantly more than their U S counterparts The largest cost difference between the two countries was found in businesses with fewer than five employees Businesses of this size pay 58 per cent more per employee in Canada 6 683 than in the U S 4 240 CAN Specialty Offers Products In Canada CAN s 2 9 billion specialty lines business which offers professional and management liability financial and other specialized property and casualty insurance products and services now offers specialty products in Canada CNA Specialty will begin accepting submissions for management liability and professional liability Coverage options are available for healthcare directors and officers liability technology and telecommunications liability employment practices liability fiduciary liability crime and miscellaneous professional liability January 19 2015 Income Tax Cuts Could Provide Relief Large scale personal income tax cuts could provide relief for working Canadians and lay the foundation for long term economic growth says a study released by the Fraser Institute Reforming Federal Personal Income Taxes A Pro Growth Plan for Canada says Ottawa could eliminate many tax credits deductions and other tax breaks broadly known as tax expenditures which would free up 20 billion This combined with expected surpluses in the future would allow the government to eliminate Canada s two middle income tax rates 22 and 26 per cent and create a new tax landscape with just two personal income tax rates 15 per cent for almost all Canadians and 29 per cent for top earners roughly two per cent of tax filers Eliminating the middle income tax rates would mean more take home pay for middle class families and broad increases in the incentives for Canadians to work save invest and engage in entrepreneurship says Charles Lammam study co author and associate director of tax and fiscal policy at the Fraser Institute Moreover eliminating or curtailing the myriad tax credits and deductions would also simplify the tax system reducing the cost of complying with the tax code accountants tax filing software etc for Canadians Cruise Offers Super Luxury Suite A luxury cruise ship debuting in 2016 will have one of the largest and most expensive suites ever offered at sea Regent Seven Seas will charge 5 000 a night per person for a luxury suite the size of a house with 3 875 square feet of space 360 square meters onboard its Regent Seven Seas Explorer ship The suite will include a grand piano two bedrooms views from three sides of the ship and a personal spa retreat with a private sauna steam room and treatment area It s designed for a minimum of two people and maximum four The Explorer is expected to launch in July 2016 The ship will spend its first season in Europe and the first of its 11 sailings will be from Monte Carlo Monaco to Venice Italy It will carry 750 guests This is Regent s first new ship since 2003 though the cruise line has just completed a 150 million refurbishment of its other three vessels All fares on the ship include dining shore excursions and tips However the price of the Regent Suite also includes unlimited spa treatments laundry services a private car with driver and guide for port calls an onboard on call butler and limousine transportation to and from the ship The new ship is part of a trend in which cruise lines are replicating resort like experiences with ships that feel like high end luxury small resorts where travelers barely feel like they re at sea Oil Prices Threaten Economy Canada s economy is being threatened by lower oil prices which have resulted from an over abundance of U S oil and Saudi Arabia s willingness to keep prices down to drive high cost producers of the market says David Wolf a portfolio manager and co manager of the Fidelity Canadian Asset Allocation Fund Fidelity Monthly Income Fund Fidelity Dividend Fund Fidelity Income Allocation Fund and Fidelity Conservative Income Private Pool In the article Canada s Oil Slick at the Private Wealth Canada website he says higher commodity prices oil prices in particular have set in motion a number of virtuous circles in Canada over the past decade or so Now however those virtuous circles could turn vicious for Canada Listing Requirements Proposed For ETFs The Toronto Stock Exchange wants to introduce listing requirements for non corporate issuers such as exchange traded funds ETFs closed end funds and structured products It has published a set of proposed rule amendments for comment in response to the growth in the number of ETF providers in recent years While structured products aren t typically listed on exchanges it says that there may be benefits to such public listings so it s proposing a set of rules devoted to listing these vehicles as well The different listing standards for different types of products reflect the fundamental differences in the trading liquidity and ability to raise additional funds for each category Too Much Focus On REIT Yields When it comes to REITs investors are too focused on yield says Blair Welch a partner at Slate Asset Management However it is not just about yield he told the RealPac and Goodmans LLP session NextGen REITS A 360 Degree Look at Recent Future Trends As part of a panel discussion he said investors need to treat real estate as if they own it Stephen Pincus a partner at Goodmans noted that REITs in Canada are only about 20 years old Changes in the REIT structure sector hit their stride in the mid 90s and since then the Canadian market has been particularly stable It has come back fast after financial blips and in fact rebounded faster after the 2008 financial crisis than the U S did However it is heading toward being a mature market and with that the source of capital is changing Michael Emory president and CEO of the Allied Properties REIT said the best way to grow is to perform When Canadian REITs were outperforming early in this decade global money found them However when other REITs started doing better than Canada the global dollars moved there Energy Needs Paint Fuller Picture While the rout in oil has sharpened the focus on economic fallout Canada tops the list as the largest consumer of energy per capita among the Organisation for Economic Cooperation and Development countries meaning that trends in the energy needs of consumers and industries alike paint a fuller picture of the country s outlook says a report from CIBC World Markets The dramatic collapse in crude has lines drawn between winners and losers says Benjamin Tal CIBC deputy chief economist And though the nation s emergence as an energy powerhouse has the negatives coming into sharper focus there will be spoils to be shared in Canada Canada is not only a major energy producer but it also consumes more energy than any other major industrialized country The report points out that this level of energy consumption could have been much higher if not for the meaningful decline in the country s overall energy intensity Canada s economy uses 25 per cent less energy per unit of GDP today than it did 20 years ago but over the past decade energy intensity stabilized as energy consumption in the oil patch and manufacturing sectors virtually cancelled each other out reflecting the past decade s growth in one and downsizing in the other Canadian manufacturers meanwhile generally use electricity and natural gas rather than oil based fuels so the drop in oil prices will have very little direct impact on the cost of production the report says That said given that natural gas prices will likely remain low compared to electricity prices certain manufacturing sectors that are natural gas intensive such as chemical fertilizer producers and the forestry industry will be among the biggest winners it says Attitude Cautious Towards Economic Prospects Canada s top economists strategists and portfolio managers are cautious about Canadian economic prospects says Towers Watson s Annual Survey of Investment Perspectives Canadian GDP is expected to lag the U S by 0 5 per cent in 2015 Forecasters also expect GDP will fall to 2 1 per cent by 2019 and rise to 2 3 per cent by 2029 which is down marginally from last year In addition expectations are that the Canadian unemployment rate will improve to six per cent this year but there is less optimism about a return to par for the Canadian dollar The majority of respondents expect the Canadian dollar to trade between 85 and 92 cents U S in the short term with moderate appreciation 93 cents expected over the next few years In the current environment survey respondents do not expect the Bank of Canada to increase the bank rate until late in 2015 For the developed markets forecasters predict equity market returns of between seven per cent and eight per cent through 2019 While the decrease in oil prices has certainly cast a pall over the expectations for Canada s growth prospects especially in Alberta there is some positive news says Janet Rabovsky director of investment consulting at Towers Watson The declining Canadian dollar has given a boost to the traditional manufacturing provinces of Ontario and Quebec where economic activity has increased and unemployment levels have started to decline Given that the Canadian dollar is not expected to surge anytime soon this will certainly offset some of the impact of the decline in the price of oil Muted growth expectations add another challenge to defined benefit plan sponsors who already face a potential increase in their pension obligations due to the decline in bond yields during 2014 Combined with potentially lacklustre future equity returns this means that DB plan sponsors may not see their circumstance improved by market forces alone Tools Scrutinize Carbon related Risks Investors have started to scrutinize the carbon related risks embedded in their portfolios using a sophisticated range of tools says research from MSCI Its 2015 ESG Trends to Watch shows in addition to the measurement of companies current carbon emissions investors can now adopt a total portfolio accounting of current and future emissions measured against market benchmarks They can also access portfolio construction techniques ranging from selective exclusions to tilts of portfolio weights based on current and future carbon characteristics of individual securities However the report warns that investors can be highly exposed both positively and negatively to fundamental shifts in energy technology in the broad diversified equity and fixed income holdings that can make up the vast majority of a portfolio Without deliberately tilting more aggressively towards the companies with large and growing renewable capacity investors potentially risk being under exposed to significant growth in future fuel technology January 12 2015 Investment Leaders Optimistic Canada s investment industry leaders are optimistic about the outlook for capital markets and their individual firms in the coming years says a survey by the Investment Industry Association of Canada IIAC IIAC 2015 Capital Markets Outlook A Survey of Canada s Investment Industry CEOs says 87 per cent of CEO respondents are forecasting status quo or improved conditions for global capital markets in the year ahead while 81 per cent share this outlook for Canada s markets These results presage attractive opportunities for investors in the coming year particularly given that our surveys of investment dealer CEOs have proven remarkably accurate says Ian Russell its president and CEO In the two previous years that we have conducted this survey the predictions of cautious optimism were borne out It is reasonable to presuppose that the outcome for 2015 will confirm our findings Russell points out that the survey was undertaken before the collapse in oil prices and the related market decline but as the latest market ups and downs show the bad news of the past three months stands a good chance of being reversed Additional grounds for optimism stem from the fact that 69 per cent of investment dealer CEOs are predicting their firm s profitability will be up in 2015 a substantial increase from the 48 per cent who forecast this last year Wealthy Use Money To Build Portfolios Most affluent Americans don t sit on their wealth they use it to build their portfolios through wise investments says a study by Spectrem Group Asset Allocation Portfolios and Primary Providers says the technology sector is the most popular choice for future investment more than half for all wealth segments Sixty one per cent of millionaire investors with a net worth of 1 to 5 million say they would invest discretionary funds in technology followed by healthcare 58 per cent and pharmaceuticals 47 per cent Ownership of life insurance policies ranges from 61 per cent of mass affluent investors 100 000 to 1 million net worth to 56 per cent among ultra high net worth investors 5 to 25 million net worth Long term insurance ownership is much lower in all segments The report also says wealthy investors look to overseas investment opportunities more than investors from the less wealthy segments Investors change their investment priorities throughout their lives younger investors are more likely to take a chance on alternative investments in order to increase the diversity of their portfolio says George H Walper Jr president of Spectrem Group Switzerland More Than Chocolate And Skiing Many Canadians have regarded Switzerland as primarily a ski destination or tax haven However Switzerland has much more to offer travelers says Peter Volny In his article Switzerland More Than Chocolate And Skiing Volny describes many of the year round delightful attributes of this popular tourist destination Some of the great features of the country include its rail system great hotels breathtaking sights and fine restaurants To read more click here Mercedes Benz Beats Sales Records Mercedes Benz Canada and its national dealer network have bested a number of previously established sales records by delivering a grand total of 40 555 Mercedes Benz passenger vehicles vans and smart units throughout 2014 This total represented the best ever year end results for Mercedes Benz Canada an overall increase of 9 6 per cent or 3 537 units when compared to the company s record breaking 2013 sales results Passenger car and luxury light truck sales totaled 33 928 units for the year This is ahead by 8 2 per cent or 2 571 units A total of 19 234 passenger car sales were delivered which exceeded last year s notable sales figures by 7 8 per cent or 1 395 vehicles These numbers were not only the best sales results ever recorded in the company s history but have also put Mercedes Benz in first place among all other luxury manufacturers in Canada Models that excelled include the E Class family and S Class Sedan sales which were ahead of 2013 by 12 8 per cent and 136 1 per cent respectively Luxury Real Estate Sales Rising The market for residential real estate over 1 million in Canada s largest urban centres in 2014 showed double digit sales gains says a report by Sotheby s International Realty Canada The report also shows an upward pressure on pricing for luxury homes in the Greater Toronto Area of Ontario and Vancouver BC finished the year with positive growth in home sales over 1 million as did Calgary AB and Montreal QC The GTA led the country with a 38 per cent year over year increase in sales volume Vancouver experienced 25 per cent growth in sales while Montreal saw growth of 21 per cent Calgary had a more modest increase of 16 per cent year over

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-02-01 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    2013 and a full 14 points below 2012 ETFs at 25 per cent gained four percentage points from last year followed by mutual funds long only funds at 17 per cent and hedge funds at 14 per cent Nineteen per cent of members chose private equity as a favourite investment strategy this year continuing the multi year increase seen for this asset class For the first time the survey asked members how their private equity allocation breaks down Sixty three per cent of private equity investment is allocated to direct investments in members own companies another 17 per cent went to private companies that were not their own and the remaining 20 per cent was targeted to funds Real estate moved from the fourth favourite investment strategy to number three at 16 per cent gaining one percentage point from last year Residential real estate investments were named most often followed by commercial investments Hedge funds lost two percentage points from a year ago with 15 per cent of members selecting a hedge fund investment as their favourite for 2014 Global Economy Will Grow Investment professionals worldwide expect the global economy to grow an average of just two per cent in 2015 says the CFA Institute 2015 Global Market Sentiment Survey Survey respondents cite political risks including secessionist and nationalistic movements as the most underestimated risk that could negatively affect markets in the next five years Survey respondents expect only modest gains in equity market indices with the TSX predicted to climb 1 5 per cent S P 500 predicted to climb 4 8 per cent the EuroStoxx 50 to increase 1 9 per cent and a 1 6 per cent rise for the Nikkei 225 Members also expressed concern about ethical issues including market fraud and the need for improved regulation and oversight of global systemic risk to improve investor trust and market integrity Canadian respondents see external economic performance as the biggest risk to local market performance Close to half of Canadian members 45 per cent cite weak external economies as the largest risk to Canada s performance in 2015 Of those 23 per cent cited weak emerging market economies as the biggest risk while 22 per cent identified weak developed economies as the biggest risk They also cite political risks developed market performance and demographic concerns as short and mid term threats to global market as 23 per cent of Canadian members cited political instability as the biggest threat to global capital markets in 2015 while the same number cited the poor performance of developed markets as a leading risk When asked about the most underestimated risk that could affect global markets over the next five years 28 per cent of Canadian respondents cited political risk including secessionist and nationalist movements and 26 per cent identified the impact from the demographic trend of aging populations Trade To Drive Growth International trade is expected to be the key driver of Canadian economic growth in 2015 as exports continue to receive a boost from a weak Canadian dollar an accelerating U S economy and to a lesser degree an improving European economy says Russell Investments 2015 Global Annual Outlook While critical risks remain primarily the direction of commodity prices oil in particular we believe a strengthening domestic economy coupled with stabilizing oil prices over a 12 month horizon should translate into modest returns for domestic equities in 2015 says Shailesh Kshatriya associate director client investment strategies at Russell Investments Canada Limited who authored the Canada market perspective section of the global report The report notes the key risks to growth in 2015 in Canada will be housing and commodity prices with the price of oil being the true wildcard There is no way to sugarcoat the fact that household debt levels are stretched and home prices elevated However we believe the Bank of Canada will be sidelined for much of 2015 In the absence of rate increases the risk of a sharp decline in home prices may well be contained yet another year nonetheless it s a risk which cannot be ignored says Kshatriya Monetary Policy Could Loosen With the U S and UK likely tightening other major economies are likely to loosen monetary policy or continue in a holding pattern says Manulife Asset Management s annual Year Ahead report The timing of a U S interest rate rise is uncertain but its experts agree that it is unlikely to happen until the second half of 2015 at the earliest and possibly may be delayed until early 2016 Drawing together the individual views from its investment and economic teams on the ground in the U S Canada Europe and in 10 markets across Asia the report addresses the outlook for 15 investment areas and asset classes including fixed income equities commodities and asset allocation Megan E Greene its chief economist says the year ahead is likely to see the global economy caught in a tug of war between a modest recovery in the U S on one hand and a slowdown in China and low to no growth in Japan and Europe on the other We expect these competing influences to keep global growth bumping along a baseline of around 2 5 per cent Accompanied online by an interactive map showing global growth and inflation forecasts as well as a video the report is available at www manulifeam com Investors Should Anticipate Downturn Money will continue to flow into real estate from across the capital markets but investors should be increasingly concerned about getting caught late in the cycle and should anticipate the next cyclical downturn in a few years says LaSalle Investment Management s 2015 Investment Strategy Annual ISA With different regions of the world growing at different speeds investors need to prepare their portfolios for a world where interest rates begin to rise more quickly in some parts than others the ISA found To prepare for this it suggests that investors diversify their holdings across a number of countries that are in different stages of the capital market cycle anticipate different interest rate environments by allocating to real estate assets with income streams that keep pace with rising inflation or debt costs in growing economies like the UK or the U S and invest in secular trends rather than cyclical ones that will be less exposed to a downturn EM Prospects Sound Emerging market returns may have dropped back over the last couple of years as economic growth cools in the BRICs and beyond However for institutional investors the long term prospects in emerging markets appear sound and allocations have remained steady says RI Insights In contrast to previous asset flights institutional investors are sanguine about the downturn with some seeing it as a buying opportunity both in equities and bonds The long term expectation is that emerging economies will continue to grow faster than developed economies and offer valuable diversification potential Part of the increased risk comes from the limited availability of reliable ESG information and comparatively poor levels of disclosure However it s pointed out that emerging market stock exchanges with sustainability standards tend to be leaders in terms of performance And where best practice exists the reporting can often be better than in developed countries Alternatives Remain In Growth Phase Alternative investments remain squarely in the growth phase with investors across the globe looking beyond absolute returns as they seek to incorporate liquidity needs regulatory status and transparency when weighing their alternatives allocation decisions says a Deutsche Asset Wealth Management survey Meanwhile The Alternative Perspective 2014 Global Survey of Investors in Alternatives shows the definition of what constitutes an alternative investment continues to vary by region and to a greater extent by organization type These dynamics create opportunities and challenges for helping investors fully understand their potential alternatives contributions The survey also found that while investors expect private equity primaries single strategy hedge funds private infrastructure and private real estate to outperform liquid alternatives multi strategy hedge funds and private equity secondaries may command larger flows as investors increasingly focus on factors other than absolute returns As well liquidity needs vary by organization type and region Going forward investors with high liquidity needs will increasingly turn to the expanding universe of liquid alternatives while those with low liquidity needs will seek to capitalize on that flexibility in the form of higher potential rewards or better fee terms VC Generates Positive Returns U S venture capital funds generated positive returns for their investors in the second quarter of 2014 says Cambridge Associates Its U S Venture Capital Index gained 8 1 per cent over the period For comparison the S P 500 was up 5 2 per cent and 7 1 per cent for the second quarter and half year period respectively The venture capital benchmark was tightly concentrated by sector with the healthcare IT and software sectors continuing to dominate the index These three accounted for 78 4 per cent of the benchmark s value in the second quarter Of these sectors software was the smallest by weight but it turned in the best performance gaining 8 5 per cent helped by widespread write ups in software companies across the index Healthcare rose 4 2 per cent for the period while the largest sector in the VC index information technology which accounted for almost one third of the benchmark s value had the smallest gain 3 2 per cent Export Growth Increasing Canada s economy is expected to see higher export growth in 2015 despite the recent decline in oil prices says the Economic and Financial Market Outlook by RBC Economics RBC is forecasting real GDP growth of 2 5 per cent in 2014 2 7 per cent in 2015 and 2 1 per cent in 2016 The report indicates that after several years of export growth coming largely from the energy sector 2014 marked a turning point with increased demand for non energy exports RBC anticipates this broadening in export demand to continue to accelerate in 2015 supported by increased U S investment in machinery and equipment as well as rising U S auto sales and housing starts RBC says that while falling oil prices may not be significant from a national real GDP perspective it will likely have diverging outcomes among the provincial economies December 15 2014 Wealthy Investors Keen On Alternative Assets The wealthier the investor the larger their investment in alternative assets says a report by Spectrem Group Use of Hedge Funds and Private Equity in the Portfolios of the Wealthy concentrates on investors with a net worth over 5 million and found that hedge funds receive more money from alternative investors particularly those with a net worth of 25 million or more than any other class of alternatives The average investment for the 25 million investor ranges from 3 5 million for private placements to 12 6 million for hedge funds While 42 per cent of investors with a net worth over 25 million own hedge funds 69 per cent of investors with a net worth of 125 million or more are invested in hedge funds The report also found that ownership of alternatives increases with an increase in wealth and decreases with increasing age George H Walper Jr president of Spectrem Group says Investors who find alternatives attractive are looking for a higher rate of return and a diversified portfolio of investments Export Growth Increasing Canada s economy is expected to see higher export growth in 2015 despite the recent decline in oil prices says the Economic and Financial Market Outlook by RBC Economics RBC is forecasting real GDP growth of 2 5 per cent in 2014 2 7 per cent in 2015 and 2 1 per cent in 2016 The report indicates that after several years of export growth coming largely from the energy sector 2014 marked a turning point with increased demand for non energy exports RBC anticipates this broadening in export demand to continue to accelerate in 2015 supported by increased U S investment in machinery and equipment as well as rising U S auto sales and housing starts RBC says that while falling oil prices may not be significant from a national real GDP perspective it will likely have diverging outcomes among the provincial economies Oil Prices Could Undo Gains The recent turmoil in financial markets resulting from plunging oil prices could undo some of the gains that wealth management businesses have made in the past year says Ian Russell president and CEO of the Investment Industry Association of Canada IIAC And as a result he sees more industry consolidation and forced adaptation to these and other forces in the year ahead In a letter to the industry he says that much of the Canadian investment industry has recovered on the back of strong equity markets over the past couple of years At the same time while dealers with significant wealth management operations have benefited from strong market conditions the institutional boutiques are continuing to suffer from weak conditions in their primary business lines U S PE Generates Positive Returns U S private equity PE funds generated positive returns for their investors in the second quarter of 2014 says Cambridge Associates LLC s U S Private Equity Index The index rose 5 7 per cent in the second quarter The PE benchmark was up 8 9 per cent at mid year For comparison the S P 500 was up 5 2 per cent and 7 1 per cent for the second quarter and half year period respectively Seven sectors in the private equity benchmark represented five per cent or more of the index and all had positive returns for the second quarter Energy the second largest sector in the index by weight was the top earner generating a 9 4 per cent return for the quarter 2014 Good Year For ETFs ETFGI s research finds 2014 is proving to be a very good year for the global ETF ETP industry The global ETF ETP industry has reached a new record of US 2 76 trillion in assets It expects the assets to break through the US 3 trillion milestone in the first half of 2015 There was US 42 billion in net new asset NNA flows in November the fourth largest NNA month on record Year to date net inflows of US 275 3 billion are a new record beating prior full year net inflows Morningstar Launches Global Equity Indexes Morningstar Inc has launched more than 60 new global equity indexes Morningstar s index group spans 45 countries in both developed and emerging markets The new indexes provide investors with benchmarking tools that reflect the performance of equity markets worldwide and will serve as the foundation for the next generation of Morningstar strategic beta indexes indexes that seek to either improve performance or alter the level of risk relative to a standard benchmark The new index group comprises global regional and country specific indexes using a transparent rules based methodology with a focus on the investability of the underlying securities The new index family can help investors with market monitoring asset allocation and attribution analysis Currently Morningstar has more than 280 indexes and approximately 40 exchange traded products track its indexes globally December 8 2014 Role Of Fixed Income Challenged The traditional role of fixed income may no longer be relevant says Ben Steiner senior portfolio manager absolute returns Fischer Francis Trees Watts Speaking at the BNP Paribas Investment Partners Thinking about shifting gear How Absolute Return Strategies can benefit fixed income portfolios session he said traditionally investors believe fixed income offers low risk diversification and capital preservation However a closer examination shows that in terms of diversification when equity does well so does fixed income And while it can have better returns when equities are down the return then is not as good as when equities are up What you really want to do is hedge your equity risk and fixed income does not do that Nor does fixed income really preserve capital he said as the better returns are only achieved by using riskier assets When inflation is taken into account there is no return so fixed income does not provide risk free return it offers return free risk Hedge Funds Turn To New Products As asset growth in traditional hedge funds from institutional investors continues to slow hedge fund managers are considering new products to attract investor assets and drive growth says EY s 2014 global hedge fund and investor survey Shifting strategies winning investor assets in a competitive landscape says after five years of focusing on transparency cost containment restructuring operating models and adapting to heavy regulatory burden hedge fund managers are shifting their focus back to growth Increased competition for assets means managers are considering a wide range of paths to achieve growth says Joseph Micallef financial services partner and Canadian wealth and asset management industry tax leader at EY One way we re seeing them meet these growth challenges is through seeking new capital allocation channels They re also evolving to meet stakeholder needs by offering new products in areas such as real estate commodities hedge funds private equity and infrastructure Geopolitics Ranks As Biggest Risk As North America and other parts of the world have recovered from the financial crisis other nations have barely felt it which could result in political instability says Carl L Tannenbaum chief economist at Northern Trust Speaking at its Still Searching for a New Normal The Global Economy in Transition session he said that geopolitics tops the list of risks to the global economy The system now faces stern tests such as Russian aggression towards its neighbours the UK referendum on EU and the rise of radical Islam In some cases such as Europe younger people cannot find jobs which may prompt them to leave or worse turn to extremism The global economic co operation that was initiated to reduce conflict may be

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-01-01 (2016-04-26)
    Open archived version from archive



  •