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Goldman Sachs: The next big investment opportunity – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It may be time to hit pause on the red-hot big cap tech trade of 2020 fueled by names such as Zoom (ZM) and Advanced Micro Devices (AMD) and take a ride on some less exciting industrial and utilities stocks.” data-reactid=”16″>It may be time to hit pause on the red-hot big cap tech trade of 2020 fueled by names such as Zoom (ZM) and Advanced Micro Devices (AMD) and take a ride on some less exciting industrial and utilities stocks.

Well, perhaps movers of dirt and sellers of electricity are more exciting investments than one thinks if listening to the new pitch from strategists at Goldman Sachs. The investment bank lifted its outlook on the industrials and utilities sector on Wednesday, citing a host of reasons to get long in a space that had fallen out of favor amidst the COVID-19 pandemic.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Industrials should benefit from improving global economic growth and potential infrastructure spending while Utilities’ dividend yield relative to the level of interest rates is near a 25-year high,” writes Goldman’s Arjun Menon. Goldman is looking for 5.6% global GDP growth in 2021, which would be vastly improved from the 5% plunge expected this year.” data-reactid=”18″>“Industrials should benefit from improving global economic growth and potential infrastructure spending while Utilities’ dividend yield relative to the level of interest rates is near a 25-year high,” writes Goldman’s Arjun Menon. Goldman is looking for 5.6% global GDP growth in 2021, which would be vastly improved from the 5% plunge expected this year.

The Dow Transports have come on strong.
The Dow Transports have come on strong.

Menon adds, “Improving global economic growth and low interest rates should also be tailwinds to select cyclical and defensive pockets within the equity market. Within cyclicals, stocks that are most positively correlated with global economic growth should see their businesses normalize faster than companies that are more tied to the domestic economy. Among defensives, low interest rates mean total cash return yields will likely be a key determinant of performance through the remainder of this year.”

Goldman retained its overweight recommendation on information technology, citing attractive fundamentals. It continues to hold bearish views on health care, real estate, energy and materials.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Only until recently have more cyclical areas of the market begun to catch bids. So if anything, Goldman’s upgrade lends validity to a move in markets that hasn’t gotten a ton of attention. Prior to Wednesday’s session, the Dow Jones Transportation Average had risen for 10 straight sessions. The index has quietly outperformed the S&amp;P 500 and Nasdaq Composite this past month (see chart above), according to Yahoo Finance Premium data.” data-reactid=”32″>Only until recently have more cyclical areas of the market begun to catch bids. So if anything, Goldman’s upgrade lends validity to a move in markets that hasn’t gotten a ton of attention. Prior to Wednesday’s session, the Dow Jones Transportation Average had risen for 10 straight sessions. The index has quietly outperformed the S&P 500 and Nasdaq Composite this past month (see chart above), according to Yahoo Finance Premium data.

Not everyone on Wall Street is sold just yet on Goldman’s call.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“We want to see if it’s more sustainable. If you look at historical cycles, once the economy truly starts to recover it is all about getting cyclical — or the stocks that got beaten down the most during the decline. They tend to rally. Normally we would have seen it by now. Because it’s such a unique recession, we haven’t seen it yet. So eventually, yes, it will be the big trade probably over the next 12 to 18 months,” Ned Davis Research chief U.S. strategist Ed Clissold told Yahoo Finance’s The First Trade.” data-reactid=”34″>“We want to see if it’s more sustainable. If you look at historical cycles, once the economy truly starts to recover it is all about getting cyclical — or the stocks that got beaten down the most during the decline. They tend to rally. Normally we would have seen it by now. Because it’s such a unique recession, we haven’t seen it yet. So eventually, yes, it will be the big trade probably over the next 12 to 18 months,” Ned Davis Research chief U.S. strategist Ed Clissold told Yahoo Finance’s The First Trade.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.” data-reactid=”35″>Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.” data-reactid=”49″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.

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UAE Makes Appointments to Investment Body, UN Aviation Group – BNN

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(Bloomberg) — The United Arab Emirates appointed new heads to several federal committees, as well as a permanent representative to the International Civil Aviation Organization.

The UAE’s prime minister, Mohammed Bin Rashid Al Maktoum, named Thani Ahmed Al Zeyoudi as head of the federal committee for direct investment, according to the official news agency WAM. Saeed Mohammed Al Suwaidi was named as permanent representative for the UAE at the United Nations’ civil aviation body known as ICAO, WAM reported.

©2020 Bloomberg L.P.

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Canadian Securities Regulators Publish Liquidity Risk Management Guidance for Investment Fund Managers – Canada NewsWire

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TORONTO, Sept. 18, 2020 /CNW/ – The Canadian Securities Administrators (CSA) today published guidance to help investment fund managers develop and maintain effective liquidity risk management frameworks for investment funds.

For the purposes of this guidance, liquidity risk is the risk that a fund is unable to satisfy redemption requests without having a material impact on the remaining securityholders. A fund must be able to sell the underlying portfolio assets within a reasonable amount of time, in an orderly manner to satisfy redemption requests. Liquidity risk can increase when the liquidity of portfolio assets held by an investment fund does not match the redemption terms and conditions offered to its investors. In recent years, the management of this potential liquidity mismatch has been a key focus for regulators internationally and the asset management sector.

“Taking a preventative and proactive approach to liquidity risk management is critical to ensuring such risks are appropriately managed,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We are publishing this guidance to support investment fund managers in their ongoing development and maintenance of robust, effective liquidity risk management frameworks.” 

The guidance contemplates normal and stressed market conditions, such as the global financial crisis in 2008 or the COVID-19 pandemic, and is based on existing regulatory requirements. It also recognizes that liquidity risk management is not “one-size-fits-all.” Investment funds vary in size, structure, investor base and other fund characteristics, and what may be considered a material risk for one fund may not be material for another.

While the guidance is intended for investment funds that are subject to National Instrument 81-102 Investment Funds, many of the practices and examples outlined may be relevant to other investment funds.

Under securities legislation, investment fund managers must establish and maintain an effective liquidity risk management framework and exercise due care, skill and diligence in managing the liquidity of their funds.

Investment fund managers should contact the securities regulator in their principal jurisdiction to discuss any questions or concerns.

The CSA encourages investment fund managers to consult the global liquidity risk management recommendations developed by the International Organization of Securities Commissions (IOSCO). These recommendations are designed to help fund managers respond to stressed market conditions.

As part of its ongoing continuous disclosure review program, the CSA will continue to monitor the liquidity risk management of funds.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co- ordinates and harmonizes regulation for the Canadian capital markets.

For Investor inquiries, please refer to your respective securities regulator. You can contact them here.

For media inquiries, please refer to the list of provincial and territorial representatives below or contact us at [email protected].

For more information:

Kristen Rose
Ontario Securities Commission
416-593-2336

Hilary McMeekin
Alberta Securities Commission
403-592-8186



Brian Kladko
British Columbia Securities Commission
604-899-6713

Sylvain Théberge
Autorité des marchés financiers
514-940-2176



Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660

Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan

306-798-4160



Marissa Sollows
Financial and Consumer Services
Commission, New Brunswick
506-643-7853

Steve Dowling
Government of
Prince Edward Island,
Superintendent of Securities
902-368-4550



David Harrison
Nova Scotia Securities Commission
902-424-8586

Jeff Mason

Nunavut Securities Office

867-975-6591



Renée Dyer
Office of the Superintendent
of Securities
Newfoundland and Labrador
709-729-4909

Tom Hall
Office of the Superintendent
of Securities
Northwest Territories
867-767-9305



Rhonda Horte
Office of the Yukon Superintendent
of Securities
867-667-5466


SOURCE Canadian Securities Administrators

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Manulife Investment Management earns top scores from United Nations-supported Principles for Responsible Investment – Canada NewsWire

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C$ unless otherwise stated
TSX/NYSE/PSE: MFC     SEHK: 945

An A+ was awarded for the strategy and governance, listed equity incorporation, and fixed-income SSA modules  

TORONTO, Sept. 18, 2020 /CNW/ – Manulife Investment Management announced today that it has been recognized with top scores from the United Nations-supported Principles for Responsible Investment (PRI) annual assessment report. For the second year in a row, Manulife Investment Management received a score of A+ for strategy and governance from the PRI for integrating environmental, social, and governance (ESG) considerations into investment practices across a range of asset classes. An A+ was also awarded in the listed equity and fixed-income sovereign, supranational, and agency (SSA) integration modules.

Other notable achievements included:

  • Manulife Investment Management’s public markets received an A in all other direct investment and active ownership PRI modules for which it was assessed. Other modules covered its investments in corporate bonds and securitized debt. Manulife Investment Management saw notable increases in its scores as compared to 2018 in areas such as: communications regarding ESG screens, and integration and implementation of analysis of the ESG information for internally managed listed equity holdings. There was also improvement in the number of companies engaged with and the intensity of engagement and effort. Similarly, for fixed income, Manulife Investment Management saw improvements in the integration and implementation of the ESG issues reviewed and its disclosure of approach with the public. For securitized, an outcome of either financial/ESG performance was also noted as an additional assessment indicator.
  • Manulife Investment Management’s private markets continued to be recognized as a leader with real estate receiving an A for the third consecutive year under the property module. In addition, Manulife Investment Management demonstrated its commitment to sustainable investing within private markets by expanding the scope of the assessment in 2019 to include submissions for infrastructure and private equity, achieving a B in each respective module.

“Manulife Investment Management strives to be a leader in ESG investment practices as a responsible steward of client capital,” said Christopher P. Conkey, CFA, global head of public markets, Manulife Investment Management. “We are very proud of our investment teams for achieving an A+ for ESG strategy and governance for the second year in a row and for earning superior marks in the screening, integration, and engagements modules for listed equities and in direct fixed-income SSA. This is not only important for our clients who entrust us to implement ESG for specific portfolio goals, but also for the overall relevance of our strategies as we look to the future of investment management.”

“Sustainability is one of the keys to creating long-term value for our clients within private markets,” added Stephen J. Blewitt, global head of private markets. “It is important for us to consider sustainability because we’re generally long-term investors across a diverse range of private markets asset classes and submitting to the PRI is an opportunity for us to demonstrate transparency while tracking our progress. It is rewarding for the work we have done to be recognized.”

The key activities within Manulife Investment Management’s investment teams in 2019, which helped to achieve the PRI scores include:

  • The release of its inaugural sustainable and responsible investment report in 2019.
  • Increased integration in industry analysis, sovereign analysis, and securitized fixed income. Manulife Investment Management developed a proprietary sovereign ESG assessment model in 2019, which is currently in use by its investment teams as an input into credit analysis. The model produces sovereign-specific baseline views on ESG issues.
  • The use of scenario analysis—a key tool for companies in demonstrating planning for climate change.
  • Engagement with 724 companies in 940 separate engagements across all investment teams. In 2019, 26% of engagements had an environmental factor focus, 20% had a social factor focus, and 54% had a governance factor focus.

For more information on Manulife Investment Management, please visit manulifeim.com/institutional

About Manulife Investment Management
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 17 countries and territories. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. 

As of June 30, 2020, Manulife Investment Management had CAD$900 billion (US$660 billion) in assets under management and administration. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

SOURCE Manulife Investment Management

For further information: Media contacts: Brooke Tucker-Reid, Manulife Investment Management Canada, 647-528-9601, [email protected]; Elizabeth Bartlett, Manulife Investment Management US and Europe, 857-210-2286, [email protected]; Carl Wong, Manulife Investment Management Asia, 852-2510-3180, [email protected]

Related Links

https://www.manulifeim.com/

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