TWM Group – Portfolio update – 2nd Quarter, 2023 

Nader Hamid, Portfolio Manager with TWM Group at iA Private Wealth presents our video. You can also see this video in French presented by Maxime Lagacé-Carter by clicking here
2nd Quarter, 2023

Welcome to TWM Group’s Portfolio Update, where we share the adjustments we have made in our portfolios over the past three month

The economic environment

In our last video, we discussed the ongoing interest rate hikes by the Bank of Canada, which aim to moderate inflation by slowing down the economy. We pointed out that although the economy still shows signs of strength, it could decelerate in the next couple of quarters. This environment creates new opportunities.

 We will discuss the adjustments we have made in each asset class:

Fixed Income and Liquidity

We have increased the Fixed Income component of our portfolios as well as the Liquidity.

These two asset classes benefit from the interest rate hikes and are currently offering very attractive yields, broadly at 5 to 6%. They are also the most defensive asset classes: they perform better in economic slowdowns and, at current rates, they are well positioned for the next 12 months.

Equity

We reduced our portfolios’ general exposure to equity.

As you know, the equity segment is the one that offers the highest long-term return in your portfolio, but it’s also the one with the highest volatility. So we have focused on more defensive sectors, such as business services and infrastructure. We favour companies with the conditions to sustain their earnings and be resilient during a potential economic slowdown. From a geographic perspective, we have mainly concentrated on North America, which is less export-oriented and more focused on services and domestic markets, therefore, typically more resilient.

We also reduced our exposure to sectors that perform poorly in economic downturns, for example, natural resources. 

Alternative Investments

This asset class offers the best risk-adjusted returns. It is an excellent source of stable returns and low volatility. This is why it is a fundamental part of our portfolios.

However, in the present macroeconomic environment, Public assets (particularly bonds) are more favorably positioned than they used to be, with the advantage of being more liquid than Alternatives. So, we have slightly adjusted our mix, reducing our exposure to Alternatives and favoring a larger allocation to public assets.

In an effort to keep you better informed, we wanted to share with you some of the high-level updates that we’ve implemented in your portfolio over the last quarter.

On behalf of the TWM Group, thank you for watching, and see you next time.

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Our clients and their families typically have a net worth of $2M or more. If you have an amount under the minimum, we still invite you to get in touch with us to discuss your options.

*Please note that TWM Group does not provide investment advice nor do we solicit or share personal information through public forums or platforms such as social media. Please communicate with us only through official channels like email, the client portal or your portfolio manager.