January 22, 2025
January 2025
Welcome to this month’s edition of InnoFocus. As we kick off the year, I’m excited to share that our model portfolios enjoyed strong performance last year. At the core of our approach is a focus on capital appreciation—seeking to grow your investment over time through allocations to high-growth opportunities. We prioritize investments that have the potential to deliver strong returns in both favorable and challenging market conditions. While growth is our primary objective, we also recognize the importance of capital preservation. As such, we take a disciplined approach to risk management, ensuring that we balance high-return opportunities with strategies designed to protect your investments during periods of market volatility. This dual approach allows us to pursue growth while safeguarding your capital. By aligning with this strategy, we aim to build long-term wealth while remaining responsive to the ever-changing market landscape. As we move into the new year, we remain committed to identifying high-growth opportunities across key sectors while maintaining a disciplined approach to risk management. In this edition, we’ll discuss the investment landscape at a high level and take a closer look at one of the new exchange traded funds that were added to your investment portfolio.
Market Overview
The U.S. economy continues to show impressive resilience, driven by strong consumer spending, robust corporate earnings, and ongoing economic growth. Despite global uncertainties, key indicators such as GDP growth, employment figures, and consumer confidence remain solid, reinforcing the U.S. as a top destination for growth-focused investments.
On the other hand, the Canadian economy is exhibiting signs of weakness, with slower growth and challenges in sectors such as housing and consumer spending. While Canada benefits from its strong natural resources sector, the broader economic environment has been underperforming relative to the U.S.
Interest rates in Canada remain meaningfully lower than in the U.S., creating an increasingly attractive yield differential for U.S. investments. Furthermore, recent geopolitical tensions involving the U.S. have added a layer of complexity to the global investment landscape, making U.S. assets and the U.S. dollar more appealing as safe-haven investments.
Given these factors, we are strategically favoring U.S. investments and maintaining a bullish stance on the U.S. dollar in the near term. This approach aligns with our goal of capitalizing on the strong economic momentum in the U.S. while managing the risks presented by global volatility.
Featured Recent Investment: BOND
Executive Summary
BOND is a low-cost, actively managed ETF from PIMCO, the world’s largest fixed income manager, with over $2.3 trillion in assets under management. This fund offers diversified exposure to investment-grade bonds, leveraging PIMCO’s extensive expertise in navigating complex bond markets. BOND’s active management allows it to adjust to changing market conditions, capturing opportunities and managing risks efficiently.
Key Investment Highlights
- PIMCO’s Expertise
PIMCO’s leadership in fixed income management provides BOND with a strategic advantage in adapting to interest rate cycles and market volatility. The firm’s active management enables BOND to navigate both developed and emerging markets with flexibility. - Cost-Effective Active Management
BOND combines the benefits of active management with a low expense ratio, ensuring cost-effective exposure to fixed income while still leveraging PIMCO’s world class market insights and fixed income mangement. - Diversification and Stability
With a broad range of investment-grade bonds, BOND offers a diversified and stable income stream. Its unconstrained portfolio management can reduce interest rate risk while seeking higher yield opportunities. - Attractive Yield in Rising Rate Environment
In a rising interest rate market, BOND can shift to focus on short- to medium-duration bonds, balancing income generation with risk mitigation.
As always, we are here to support you in achieving your financial goals. If you have any questions or would like to discuss any of the investments or strategies mentioned in this edition of InnoFocus, please don’t hesitate to reach out. We look forward to continuing this journey together and helping you navigate the evolving market landscape.
Disclaimer
This newsletter is provided for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual goals, risk tolerance, and consultation with a professional financial advisor.
This information has been prepared by Luc LeBlanc, CFA who is a Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability.The opinions expressed are based on an analysis and interpretation dating from the date ofpublication and are subject to change without notice. Furthermore, they do 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. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and a business name under which iA Private Wealth Inc. operates.