Skip to content
News & commentary

September 2020 Portfolio Management Team Update

Home News & Commentary September 2020 Portfolio Management Team Update
Zaw Tun

Zaw Tun

Market & Economic Environment

It was full steam ahead for the equity markets in August, as investors anticipated a return to global growth, alongside a slowing trajectory of new COVID cases. This enthusiasm combined with favorable central bank policies led U.S. indices to post their best August performance in decades. The Dow Jones Industrial Average and S&P 500 surged 7.6% and 7.0% respectively, their best performance for the month since the mid-1980s, while the tech-heavy Nasdaq climbed 9.6%, its best August showing in two decades. In contrast, the TSX gained only 2.1% over the month, weighed down by the consumer staples, healthcare and utilities sectors.

On the economic front, last week’s GDP report pointed to the steepest quarterly decline in Canada’s economy since 1961, with an 11.5% contraction between the months of April and June, or 39% on an annualized basis. Despite the abysmal backdrop, pent-up demand from Canadian consumers drove June’s retail sales to an unprecedented +23.7% over May’s numbers, led by spending in the auto sector (+53%), furniture (+71%), sporting goods (+65%) and gasoline (+26%).

South of the border, interest rates are expected to remain at their current levels for the foreseeable future, as the U.S. central bank announced its willingness to let inflation run moderately above the long- standing 2% target, in efforts to prioritize maximum employment and price stability.

(Data Source: NBIN Research, FactSet).

Our Strategy

While it seems that the equity markets are confident about the prospects for a V-Shaped recovery, we believe the current environment warrants a healthy degree of caution. The rally as it stands has been led almost entirely by the technology sector (year-to-date +36% for the S&P 500 and +72% for the TSX, based on FactSet data), with an extreme degree of concentration in the major tech firms such as Apple, Amazon, Tesla and Shopify. In fact, Apple’s unprecedented rally gave it a market capitalization of over

$2 trillion by end-August, exceeding that of the entire Russell 2000 Small Cap Index. Therefore, even in the face of such low interest rates, we believe that the deviation between equity prices and their underlying fundamentals continues to widen with each passing day. Given that we are entering the most volatile months of the year, the Portfolio Management Team (PMT) remains vigilant about current market conditions and will seek to tactically lower our equity exposure when opportune.


This information has been prepared by Luft Financial. Opinions expressed in this article are those of Luft Financial only and do not necessarily reflect those of iA Private Wealth. Furthermore, this does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors.

How do we elevate your wealth?

It begins with understanding your needs and creating a comprehensive and tailored financial plan to help reduce tax, manage risk and grow your portfolio over the long term. Learn more about how we help you achieve financial security and peace of mind.

News & commentary

March 2024 Portfolio Management Team Update

March 2024 Portfolio Management Team Update By Elvis Picardo, CFA®, CIM, Senior Portfolio Manager, iA Private Wealth March 20, 2024 Market Review Global equities advanced for the fourth successive month in February, as growing confidence in a “soft landing” for most major economies took the MSCI All-Country World Index to a new high. The TSX […]

Read more

February 2024 Portfolio Management Team Update

February 2024 Portfolio Management Team Update By Elvis Picardo, CFA®, CIM, Senior Portfolio Manager, iA Private Wealth February 22, 2024 Market Review Global equities advanced for the third straight month in January, despite a significant decline on the last day of the month after the Federal Reserve signaled it was in no hurry to cut […]

Read more

2023 IAPW Tax Document Distribution Dates

2023 IAPW Tax Document Distribution Dates There are different mailing dates for different account types. Please click on the link below to view the expected delivery for both mail and online tax slips and reports. 2023 Important Year-End Information – Tax Document Distribution Dates

Read more