Cidel - Q1 | Quarterly Report


Looking Back
In our opinion, these were the most important stories in Q4…
In 2019, equity markets rallied strongly in the fourth quarter, as reflected in the increase of various indices during this period. The S&P 500 rose 9.1%, the MSCI World increased 8.6%, the MSCI Emerging Markets was up 9.6%, and the TSX rose a moderate 3.2%. For the year, the S&P 500 was up 31.5%, the MSCI World up 27.7%, the MSCI Emerging Markets up 12.8% and the TSX up 22.9%, resulting in one of the best years for equity markets since the financial crisis.

The key driver of the market rally during the fourth quarter was an easing of some macroeconomic factors which had been a negative overhang in the middle of the year. In the U.K., the Tories’ election victory increased the likelihood of a resolution for the Brexit saga and resulted in a significant rally in the sterling and U.K. stocks. On the trade front, tensions eased as markets increasingly came to expect a ‘Phase One’ deal between the U.S. and China. In the U.S., the headlines regarding President Trump’s impeachment were digested by markets as a non-event given the level of partisanship in U.S. politics. Once again, the IMF lowered its growth forecast for 2019 in the fourth quarter, from 3.3% to 3.0% with expectations for a rebound to 3.4% in 2020, a reduction from 3.5%.
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Looking Forward
As we enter Q1, the points below have our Investment Team's attention...
The market returns for 2019 were outstanding but, for us, one of the most memorable events was Encana moving its headquarters from Calgary to the United States. Certainly, the news reported this as a commentary on the Canadian business environment, but the quote that remained with me was from Encana’s CFO Corey Code; “We estimate today that less than 10 per cent of our ownership is comprised of passive accounts, far less than the 30 per cent average for our U.S. peers.”

Interestingly enough, the key reason that Encana decided to relocate was the existence of a greater number of passive investors in the U.S. Encana determined that more money would flow into its equity once it is listed in the U.S. not because it is necessarily a better investment, but simply because it has changed its address. If passive investing is such a bonus, Encana will not be the last company to relocate. This quarter, we decided to consider the implications of this statement for markets and investors alike.
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Market Implications of Potential Presidential Impeachment 

The events leading to an impeachment, and the impeachment process itself, add a layer of volatility to financial markets.

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Cidel's Work
with Non-profit Organizations

The charitable and non-profit sector is diverse with areas of focus. With the good work these organizations undertake, they often make a
difference for entire communities.

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Lessons from Japan


During the recent months, Charles Lannon, Cidel’s Head of Equity Research, has presented our work across Canada on the lessons we can learn from the stagnation Japan has witnessed for decades. The following
is a summary of the discussion and the
key takeaways from our work on Japanification.

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Cidel in the News

Cidel's Charles Lannon is a speaker at
the DB Investment Forum in December

Cidel Asset Management has been appointed to manage Canadian equities
for a leading Canadian financial institution, ATB Wealth 

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Cidel’s CIO, Arthur Heinmaa, comments on the importance of managing portfolios more effectively in The Globe and Mail

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Amanda Lashley, Vice President of Trust & Legal at Cidel Bank & Trust Inc is a recipient of the 2019 STEP Founder's Award for Outstanding Achievement 

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Let's Talk

At Cidel, we pride ourselves on our deep understanding of our clients' goals. Only with that understanding can we provide you with the customized solutions that will achieve your objectives. We would love to sit down with you to see if we can help.

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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information contained in this document has been compiled by Cidel Asset Management Inc. from sources believed to be reliable, but no representations or warranty, express or implied, are made by Cidel Asset Management Inc. as to its accuracy, completeness or correctness. The opinions expressed are as of the date of this publication and may change without notice and are provided in good faith, but without legal responsibility. Cidel Asset Management Inc., carrying on business as Cidel (“Cidel” is a registered trademark) is registered as a portfolio manager, investment fund manager and exempt market dealer in Ontario. Cidel is also registered as a portfolio manager and exempt market dealer in the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan. In Quebec, Cidel is registered as a portfolio manager, investment fund manager and exempt market dealer. This document may not be reproduced, distributed or published by any recipient hereof for any purpose.