Mark Machin, who departed the CEO job at Canada Pension Plan Investment Board after his controversial decision to travel internationally to obtain a COVID-19 vaccine, has emerged as CEO of a new investment company.
Mr. Machin has co-founded New York-based Opto Investments Inc., a company that plans to help registered investment advisers, or RIAs, in the United States access the kind of private-market and alternative assets that make up a huge chunk of CPPIB’s portfolio.
Opto Investments’ co-founders include Palantir co-founder Joe Lonsdale, who will serve as the company’s chair, and Jacob Miller, formerly of Ray Dalio’s Bridgewater Associates.
CPPIB forced Mr. Machin to resign as chief executive in February, 2021, after he travelled to the United Arab Emirates and received a COVID-19 vaccination before they were widely available in Canada and while the Canadian government was advising against unnecessary travel. Mr. Machin had permission for the trip, but the CPPIB board was unaware of his vaccine plans, sources told The Globe and Mail at the time.
Sources also told The Globe that Mr. Machin had told CPPIB’s board in the fall of 2020 that he planned to leave in 2021 after five years at the helm. The vaccine imbroglio accelerated the timeline.
CPPIB said later in 2021 that Mr. Machin, who stayed on as an adviser until mid-August, received no severance package and had his departure treated as a retirement. He received $3.98-million in his final year, consisting of $625,000 in salary, an annual bonus that topped $1-million, and other long-term and pension compensation.
CPPIB said as long as he adheres to non-compete arrangements, his deferred compensation, tied to the performance of the CPPIB fund, will continue to accrue until his awards mature, some as late as 2026. CPPIB declined to comment Tuesday on whether the Opto venture would be considered competitive to CPPIB. Mr. Machin was unavailable for comment Tuesday.
Mr. Machin is also a member of the Government of Singapore Investment Corp.’s international advisory board, Singapore’s sovereign wealth fund and an adviser to its portfolio strategies committee.
Over CPPIB’s 2 ½ decades, it has transitioned from a passive investor to an active owner of a wide range of assets not easily accessible to ordinary Canadians. At June 30, its private equity and real assets investment departments had $259-billion, nearly half of the $523-billion portfolio. Real assets include infrastructure, real estate and renewable energy.
Opto said Tuesday it received US$145-million in financing from Tiger Global and other funders including Mr. Lonsdale’s 8VC and Michael Dell’s MSD Capital.
The company has premised its business plan on the idea that the vast majority of individual investors have little access to private investments, with the average wealth adviser putting just 0 per cent to 4 per cent of the portfolio in those asset classes.
Opto says it has created a platform to give RIAs access to exclusive private-market investments. Opto says the platform manages the process from start to finish: from sourcing, diligence and subscribing to funds; to monitoring positions, capital call schedules, investor servicing and reporting.
The company has 45 employees and says it has already partnered with more than 80 RIAs.
How to Start Investing With Little Money – Yahoo Canada Finance
Written by Tony Dong at The Motley Fool Canada
Successful investing involves holding a diversified portfolio of stocks, staying the course, and making consistent contributions. All of this helps take advantage of compound interest, which Albert Einstein described as “the eighth wonder of the world.”
Still, for investors starting out with less money (think $1,000ish), investing can be daunting. Some stocks have high share prices that can be a barrier to entry for new investors. Trying to buy enough shares of different companies to stay diversified can be difficult.
This can be discouraging, but fear not! There is a solution if you’re strapped for cash. With this alternative, even the smallest of investment portfolios can grow strongly.
ETFs are the solution
Thanks to exchange-traded funds (ETFs), investors no longer need vast sums of money to buy dozens of individual stocks. ETFs can hold a basket of up to thousands of various stocks. Some ETFs are basically all-in-one stock portfolios that are managed on your behalf by a professional. They trade on exchanges like any other stock with their own ticker symbol.
This approach is capital efficient. For instance, an ETF might trade at a price of $20 per share yet hold over 1,000 stocks in it. With your $1,000, you can now buy 50 shares of that ETF and gain proportional exposure to all of its underlying companies. This way, you become diversified without needing to buy 1,000 different stocks!
Index ETFs are ideal
ETFs do have a cost, though — the management expense ratio (MER). This is a percentage fee deducted from your investment on an annual basis. For example, an ETF that charges a 0.05% MER would cost an annual fee of 0.05 * $1,000 = $5 on your $1,000 investment.
Keeping this as low as possible is ideal. In general, the ETFs with the lowest MERs are index funds. These are passively managed investments that track an existing stock market index, like the S&P 500. With index funds, fees are low since the fund manager isn’t actively trying to pick stocks, so fund turnover remains at a minimum.
I like the S&P/TSX 60 Index. This index tracks 60 blue-chip, large-cap stocks listed on the TSX. Buying the S&P/TSX 60 is a great way to track the long-term performance of the Canadian stock market while gaining access to a portfolio of dividend stocks.
Why the S&P/TSX 60?
From 2000 to date, the S&P/TSX 60 has returned a compound average growth rate (CAGR) of 6.59% with dividends reinvested. This is a respectable return that could turn your initial $1,000 deposit into six-figures over two decades with modest contributions. Let’s use a real-life example to see this in action.
Imagine you started investing in 2000 as a broke 18-year-old student with just $1,000 to your name. You invest it all in an index fund tracking the S&P/TSX 60. Every month thereafter, you scrounge up $100 and invest it promptly in a disciplined and consistent manner.
After holding the ETF for 22 years, consistently putting in $100 every month, reinvesting all dividends, and never panic selling during crashes (even through the Dot-Com Bubble and the 2008 Great Financial Crisis), you would end up with $126,353.
If you started with more than $1,000, held longer, or contributed more than $100 monthly, your returns would have been even better. With this strategy, maximizing your contribution rate and staying invested is key. Don’t try and time the market!
Do you want to implement this passive, hands-off investing strategy? A great ETF to use is iShares S&P/TSX 60 Index ETF, which has a low MER of just 0.20%. XIU trades at around $30 per share right now, making it accessible to investors with a smaller portfolio.
Before you consider iShares S&P/TSX 60 Index ETF, you’ll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in September 2022 … and iShares S&P/TSX 60 Index ETF wasn’t on the list.
The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 9/14/22
Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
FPIs pump in Rs 8,600 crore in September; pace of investment slows – Economic Times
After infusing more than Rs 51,000 crore last month, foreign investors have slowed down the pace of equity buying in India in September so far, as they invested a little over Rs 8,600 crore, on sharp depreciation in rupee. Going forward, Foreign Portfolio Investors (FPIs) are unlikely to buy aggressively amid rising dollar, VK Vijayakumar, Chief Investment Strategist at , said.
Indication of further rate hike by the US Federal Reserve, fears of a recession, depreciating rupee and continued tensions in Russia and Ukraine will affect FPI flows, Basant Maheshwari, smallcase manager and Co-founder, Basant Maheshwari Wealth Advisers LLP, said.
The latest inflow comes following a net investment of Rs 51,200 crore in August and nearly Rs 5,000 crore in July, data with depositories showed.
FPIs turned net buyers in July after nine straight months of net outflows, which started in October last year. Between October 2021 till June 2022, they sold Rs 2.46 lakh crore in the Indian equity markets.
According to the data, FPIs have bought equity to the tune of Rs 8,638 crore during September 1-23.
However, FPI activity has turned highly volatile with alternate bouts of buying and selling. They have sold on seven occasions in this month so far. In fact, in the last two trading sessions, they have pulled out Rs 2,500 crore from the Indian equity markets.
Vijayakumar has attributed increased FPI selling in recent days to rising dollar and rising bond yields in the US.
In addition, the 75 basis points (bps) rate hike by the US Fed for the third consecutive time to control rising inflation and the surging dollar have impacted FPI buying, Wealth Advisers LLP’s Maheshwari said.
“The US Fed’s hawkish tone on interest rates and the fear of a global recession fuelled pessimism among investors,” Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, said.
Foreign investors have been slowing down their equity buying in India since September. The scenario turned adverse after a hotter-than-expected inflation report dashed hopes that the US Fed would scale down its rate hikes in the coming months.
The August US inflation edged 0.1 per cent higher from the preceding month to 8.3 per cent. Compared to one year ago, it eased as it was 8.5 per cent previously.
The aggressive stance of the central bank chair, which made it apparent that the Fed will once again go for another 75 bps hike for the fourth consecutive time in its next meeting as well, dented sentiments and turned investors risk averse towards emerging markets like India, Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said.
Also, currency movement is another factor that FPIs track very closely as it has a significant impact on the returns that they make on their investments in any country. Therefore, the outflows tend to accelerate in a scenario of rapid currency depreciation.
The sharp depreciation in Rupee as it touched all-time low of Rs 81.09 against the dollar does not augur well for foreign investments, he added.
“With the dollar index above 111 and the US 10-year bond yield above 3.7 per cent FPIs are unlikely to buy aggressively, going forward. The situation will change if the dollar index and US bond yields decline,” Vijayakumar said.
In addition, foreign investors have pumped in Rs 5,903 crore in the debt market during the month under review.
Apart from India, FPI flows were positive for Indonesia and Philippines, on the other hand, South Korea, Taiwan and Thailand witnessed outflows during the period under review.
Top 3 investment bets for millennials to beat market volatility and make money – Economic Times
There is a thrill for many to do things that are so-called out of the ordinary. As mentioned in the first part of this story, millennials are the impatient investor class who are all up to ignore the stereotypes, bet even on riskier investments.
On that note, in the first part we talked about three new-age investments that go beyond the ordinary for the millennials or the digital natives. To know more about millennials and more about the investment options, you can read the first part here:
Top 3 new-age investment bets for millennials looking to take risk and earn big
Nonetheless, it is never bad to be cautious. A roller coaster ride is fun at the amusement parks but when it comes to using the hard-earned money, no one will be keen to lose their savings. It is often said volatility is the daily crux of the market. Experts also opine it can be a motivation to capitalize on the imbalances.
“Volatility is the ghost that haunts you only if you look at it. The best way to avoid volatility is to ignore it; don’t trade into a market when there’s euphoria or out of it when there’s panic. Instead, constrict and hold a diversified portfolio for the long term, or better still, a mutual fund, which isolates individuals from volatility shocks,” Utkarsh Sinha, managing director at boutique investment bank firm Bexley Advisors said.
The economy too is at a volatile juncture with slower-than-expected growth recovery and galloping inflation. For stocks, the plausibility of earnings growth is diluting and valuation is said to trade below the long-term average. So, what could be better than to have some safe options even during a volatile period, enjoy the thrills of new-age investments and still achieve the monetary goals?
Girirajan Murugan, the chief executive officer at FundsIndia, lists more instruments that will help millennials to avoid some volatility:
InvIT – Infrastructure Investment Trust
This involves a trust channeling investments from individuals/institutions toward infrastructure projects. In a developing country like ours, the demand for good infrastructure is huge and perennial, in my opinion, Murugan said, adding that an investment in an InvIT with a good management will be a fruitful investment for the long term.
However, most infrastructure projects are subject to government regulations and interference. Change in the political space could affect such investments. Lack of choices to choose from is a severe disadvantage. Being a budding avenue, the participation in this investment is comparatively low. This means that selling them in the current market could be difficult. However, if the market for this type of investment takes off, then this concern will be void.
REIT – Real Estate Investment Trust
Similar to InvITs, REITs pool resources to invest in real estate assets. “Real estate investment has not lost its flair even today, despite being a conventional investment. That’s exactly why I’d like to call this a “grandfather-approved investment,” Murugan said.
By enabling part ownership, REIT has made real estate more accessible for all sections of people. REIT investments buy you ownership to the property in question, proportionate to the investment made. The income from this asset shall also follow the same proportion.
There are 2 categories of REIT – tradable and non-tradable. Some non-tradable REITs disclose the share values only after 18 months. Non-tradable REITs also carry the disadvantage of less liquidity.
ESG (Environmental, Social and Governance) Investing
In this mode, the investment is directed toward the development of businesses that toil for the betterment of the world. One can either invest through readily available ESG Mutual Funds, or they can identify the right companies and invest in their stocks.
“As far as ESG investing is concerned, it’s a thumbs up from me, and I say this from an ethical standpoint. The reason is that a good planet and a harmonious society are something we can’t survive without. When it boils down to it, man will eventually be forced to choose survival over profitability. If you choose to do it for the purpose, rather than for profitability, this may be one of your best investments,” Murugan said.
ESG assets are on track to exceed $53 trillion by 2025 and represent more than a third of the $140.5 trillion in projected total assets under management (AuM), according to Bloomberg Intelligence.
Bexley Advisors’ Sinha said millennials are at the best point of their lives currently to invest, as they have the bulk of their lives ahead of them. With these options explained, the millennials perhaps have better insight on the options available. Remember how we introduced the generations in the first part of the story and talked about an angry young man from Bollywood? Well, keep the swag and invest with prudence.
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