We favour U.S. equities but still have a very negative view on the U.S. economy and we feel that this economic crisis will take longer to resolve than what policymakers are hoping for. We are looking to names that are fundamentally sound and have a better opportunity for outperforming during this cycle. We have also added to names that were already in our portfolio, some of which include Bank of America and Las Vegas Sands. This is consistent with our Shunned Stocks strategy.
Concerns over the possibility of Greece defaulting will continue to cast its shadow near term and volatility will rise and fall based on perceived outcomes. We tactically added to some current equity positions as markets sold off, however, we are only adding to conservative names which pay us dividends as we wade through the markets and are trading below their long-term historical valuations.
The US Unemployment Rate peaked in 2009 at 10.1% and has since dropped to 8.5%. This is highlighted by many analysts as a sign of recovery. And it has been a sign of recovery in every business cycle in post-WW2 history…but not this time. The Participation Rate is the % of the population that is either working or looking for work. As the economy recovers, the Participation rate rises as people are encouraged to enter the workforce to find jobs. The Participation Rate peaked in 2000 at 65%. In this cycle it has fallen to 58% and has not moved higher as the Unemployment Rate has dropped. This has never happened in post-WW2 history. What is happening is workers are giving up looking for work in a dismal labour market and are no longer being counted as part of the labour force in the official employment survey. If the participation rate was assumed to have remained constant at 63% (average between 1988-2008) the Unemployment Rate would be closer to 12%, unchanged from 2009. In addition, those jobs that are being created are typically lower pay work with limited benefits.
Our fixed income portfolios continue to be underweight credit and overweight duration with a US and Canadian dollar bias relative to the global benchmark. Our equity portfolios are positioned in a similar defensive fashion with material underweighted toward cyclical sectors such as industrials, energy, and materials, and material overweights in cash and consumer discretionary and staples, with a US bias relative to Canada.
Beginning now, you can offer your retail clients the kind of sophisticated asset allocation and risk management strategies that institutions and high net-worth individuals have relied on to grow their wealth. Yorkville Asset Management’s principals collectively bring years of successful wealth management experience serving institutions, mutual funds and affluent investors.
Additional Info
- Credentials CIM
- Telephone 647.776.0468
- Email rkamhi@yorkvilleasset.com
- Title Portfolio Manager
Additional Info
-
Title
TelPay Inc., Excellence Canada
Retired President and CEO, Alterna Bank
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Additional Info
- Credentials CFA MBA P.Eng.
- Telephone 647.776.0730
- Email rfeatherby@yorkvilleasset.com
- Title Fixed Income Portfolio Manager
Meet the Yorkville team and see what we can do for you.
Yorkville Asset Management Inc. ("Yorkville") provides boutique investment advisory, insurance, estate and trust planning, and discretionary portfolio management services. Our clients range from professionals to foundations and institutions, to high net worth families. We believe that every one of our clients is distinct, and we will work with each client to come up with a customized comprehensive financial plan. We emphasize managing risk and growing wealth by investing in domestic and international companies that meet our Quality, Valuation, and Risk (QVR) standards.
Yorkville Asset Management Inc. ("Yorkville") provides boutique investment advisory, insurance, estate and trust planning, and discretionary portfolio management services. Our clients range from professionals to foundations and institutions, to high net worth families. We believe that every one of our clients is distinct, and we will work with each client to come up with a customized comprehensive financial plan. We emphasize managing risk and growing wealth by investing in domestic and international companies that meet our Quality, Valuation, and Risk (QVR) standards.
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