(October 15, 2007) According to the latest CIBC World Markets economic forecast, by the end of 2008 the loonie rate will reach a 50-year high of 1.05 US dollars. But even at this level, it will not cool down the burnt Canadian economy, which will outperform the US economy in 2008.
“The madman’s run is not over yet,” says Jeff Rubin, chief economist and chief strategist at CIBC World Markets. “By the end of next year, you’ll get as little as a nickel back if you trade your loonies for dollars, which will be the highest bonus since 1960.”
Pointing to rising housing prices in Canada while U.S. housing prices are falling, and the fact that the TSX is expected to outperform the S&P 500 for the fourth year in a row, Rubin argues that Canada’s real economic growth is outpacing that of the U.S.
As the developing world now drives global demand for resources, the U.S. economy’s dependence on purchases of Canadian raw materials is decreasing, he adds, making Canada less dependent on U.S. economic growth.
“Canadians are becoming wealthier compared to their American neighbors after falling behind in the IT-driven economy in the 1990s,” Rubin says. “At the heart of this reversal of fortune is the massive change in global trading conditions over the past decade, which has resulted in the migration of economic value added (activity) from information technology back to underground resource rents.”
Rising commodity prices continue to increase corporate profits, personal income and government tax revenues in Canada. This, in turn, increases consumer spending, business investment and government spending, which will drive the country’s economy, according to the report.
In the US the story is completely different. The report said a slump in construction, business caution on inventories and a consumer sector hit by credit concerns threaten to drag GDP growth to near zero in the fourth quarter, with a slightly better outlook for the first quarter of 2008.
“The much stronger domestic economy north of the border will, in turn, translate into divergent monetary policy in the two countries, with the Federal Reserve Board easing by another 50 basis points while the Bank of Canada remains on the sidelines,” Rubin says. .
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Mackenzie hires a new CIO
(October 15, 2007) Mackenzie Financial Corporation announced that Norman Raschkowan has been hired as executive vice president and chief investment officer.
Raschkowan joins Mackenzie from Standard Life Investments, where he also served as CIO. He will begin his role as Mackenzie’s CIO on October 22, 2007.
“Norman is a proven leader who will play a key role in Mackenzie Investments’ investment division,” said Charles R. Sims, CEO of Mackenzie Investments. “His proven track record of long-term investment performance, client service and managing a team of investment professionals make him a strong addition to our management team.”
Raschkowan has experience in both fixed income and equity investing. Before being appointed CIO at Standard Life, he was the head of the US equity investment teams.
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AGF adds fund managers
(October 15, 2007) AGF Funds has added portfolio managers Jamie Horvat and Caterina Prato to its five fund management teams.
Horvat will join Bob Farquharson and Charles Oliver as portfolio manager of the AGF Canadian Resources Fund Limited, AGF Global Resources Class and AGF Precious Metals Fund. Horvat currently co-manages the AGF Canadian Small Cap Fund and is an associate portfolio manager of the AGF Canadian Growth Equity Fund.
Prato, an analyst on AGF’s North American Equities team, has been added to the AGF Canadian Stock Fund and AGF Canada Class, managed by Martin Hubbes.
Additionally, one of AGF’s external advisors, Driehaus Capital Management, has added Dan Rea to the management team of the AGF Aggressive Global Stock Fund, which includes Lynette Schroeder and Meighan Harahan.
“At AGF, we believe it is important to build strong investment management teams that help us ensure long-term continuity of performance and promote an environment that encourages innovative thinking, ingenuity and information sharing,” says Martin Hubbes, AGF executive vice president and chief investment officer. “The addition of Jamie, Caterina and Dan as portfolio managers to these funds demonstrates AGF’s continued commitment to excellence, continuity and long-term performance.”
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Standard Life strengthens the composition of segment funds
(October 15, 2007) Canada’s Standard Life Assurance Company has launched a range of new segregated funds, as well as a reduced-fee option for high-net-worth investors who invest at least $250,000.
Standard Life has reorganized its segmented fund offering to create six fund families and complemented its offering by introducing eight new mandates for its Ideal Segregated Funds. These include the Global Monthly Income Fund, Dividend Income Fund, US Dividend Growth Fund, European Equity Fund, US Mid Cap Fund, Canadian Equity Focus Fund, US Equity Focus Fund and Global Equity Focus Fund.
Standard Life also created the Ideal Segregated Fund, a platinum option for those who invest at least $250,000. Standard says this is an option for customers approaching retirement who want to consolidate their assets and take advantage of reduced fees.
“We want to help advisors improve their clients’ retirements,” says Michel Fortin, vice president of marketing for retail markets at Standard Life. “Advisors can help their clients consolidate assets and take advantage of the many benefits of segregated funds at a fee that is directly competitive with mutual funds.”
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CI offers T-rated funds
(October 15, 2007) CI Investments has introduced a Class T option for some of its mutual funds that allows investors to receive a tax-efficient monthly distribution from unregistered investments.
Class T CI is available for 25 funds within the Corporate Class CI. The combination of the Class T and Corporate Class structure should minimize annual dividends and allow investors to switch between funds without triggering taxable capital gains.
“This structure means investors can benefit from the tax benefits and a wide selection of top investment funds within the CI Corporate Class as they save for retirement and then, in retirement, generate a stream of income by switching to Class T tax-free,” he says Peter W. Anderson, CEO of CI.
Class T will also be available for four funds in the CI portfolio series, which are unit trusts. Investors will have the choice of an annual payout of 5% or 8%, or they can create an individual payout through a combination of Class T shares and other companies.
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Mavrix launches the Asia-Pacific Fund
(October 15, 2007) The Management Board of the Mavrix Fund announced the launch of the Mavrix Asia Pacific Fund.
The fund will be actively managed to provide investors with access to equity growth opportunities in the Asia-Pacific region. The fund will be overseen by recently hired Eric Yan, who is vice president and associate portfolio manager at Mavrix. Yan has over 11 years of experience in Asian equities.
The Fund is available for sale throughout Canada through licensed investment advisors.
(15/10/07)
