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How to invest for the rise of Gen Z. Plus, the stock picks of award-winning fund managers, and what BMO is predicting for the TSX in 2021 – The Globe and Mail

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BofA Securities recently published a series of reports on the economic and market effects of Generation Z, the cohort born between 1996 and 2016, providing a number of promising investment themes and some truly surprising data points.

Working life is set to begin for those born in the early years of Gen Z, so BofA’s survey of 15,000 people sought to gain insight into changing consumption habits. Gen Z will account for an estimated 27 per cent of global income, or US$33-trillion, by 2030, out-earning Millennials the following year.

The survey results highlighted a demographic group almost constantly online, spending more than 10 hours per day on their phones. Arguably, the best investment opportunity that arises from this are stocks with exposure to online payments – Gen Z prefers to pay by phone over every other method, with credit cards a distant third place.

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Only half of U.S. teens have a driver’s license – a definite cause for concern for automakers – and less than 50 per cent consume alcohol and more than half restrict meat intake in some way.

Media consumption appears to be the sector where the most change is set to occur. Only 25 per cent of Gen Z watch broadcast television ever, compared with 45 per cent for Millennials. Only a quarter of Gen Z watch traditional sports, and that makes the future of broadcast TV even more dire.

More than half of Gen Z reported playing three hours or more of video games per week, and followed eSports. They prefer user generated video content services like TikTok over professional productions available on Netflix and Amazon Prime.

The research report listed a number of stocks set to benefit from all of these trends. Ubisoft Entertainment SA for video gaming and eSports, Ascential PLC for online payments, are two examples.

I used to roll my eyes at these generational change research reports, but I don’t anymore. Yes, the changes take place over long time periods and often the investment ideas aren’t immediately actionable. The analysts can get it wrong, choosing to emphasize the wrong trends. In hindsight, however, the major economic trends predicted as Millennials entered the work force were the rise of social media and streaming content, and as investments, those trends worked out extremely well.

— Scott Barlow, Globe and Mail market strategist

This is the Globe Investor newsletter, published three times each week. If someone has forwarded this e-mail newsletter to you or you’re reading this on the web, you can sign up for the newsletter and others on our newsletter signup page.

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Stocks to ponder

BRP Inc. (DOO-T) Just last month, the stock was trading at a record higher. However, since Pfizer Inc. released positive clinical trial data for its coronavirus vaccine on Nov. 9, BRP’s share price has tumbled 16 per cent. The recent pullback reflects concerns by investors that once there is a coronavirus vaccine, the heightened demand for BRP’s products will drop off as demand was pulled forward. But the stock is now oversold and pullbacks in the share price may represent buying opportunities, according to our equities analyst Jennifer Dowty, who provides this profile of the company. (for subscribers)

Enthusiast Gaming Holding Inc. (EGLX-T) Shares in the TSX gaming stock have surged over the past week following a quarterly earnings report that blew past analysts’ forecasts. Now, it’s about to make its Nasdaq debut, attracting even more investor attention. Brenda Bouw tells us more. (for subscribers)

The Rundown

BMO predicts big gains ahead for the TSX and S&P 500

BMO Capital Markets’ chief investment strategist Brian Belski, one of the Street’s more reliably bullish prognosticators, doesn’t believe skyrocketing COVID-19 cases and spreading lockdowns will get in the way of the equity market’s upward trajectory. On Thursday, he released his 2021 market outlook, setting a year-end S&P 500 target of 4,200 – a more than 17-per-cent rise from current levels. For the S&P/TSX Composite index, he set a target of 19,500, a rise of more than 15 per cent that would bring it to record highs. Darcy Keith reports on Mr. Belski’s rationale and his new sector recommendations. (for subscribers)

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Gap between vaccine hopes and pandemic reality poses market hazard

As winter approaches, U.S. equity investors are weighing brightening prospects for a COVID-19 vaccine against a resurgence of the pandemic across the United States. Several market strategists have predicted significant gains in U.S. stocks in 2021, as long as Congress passes further fiscal stimulus and a vaccine becomes widely available in the first half. But the path for stocks could be bumpy while investors await those developments, they said. April Joyner of Reuters reports. (for everyone)

Also see: An overlooked key risk for markets: U.S. gridlock will hamper stimulus

These dividend mutual funds for DIY investors stack up well against a popular ETF

It’s worth keeping an open mind about mutual funds. Occasionally, they put up a strong fight against ETFs. Rob Carrick provides some examples. (for subscribers)

Value investing’s return may only be just beginning – and these growth stocks have the most to lose

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Value stocks started to outperform their high-flying growth counterparts earlier this month when Pfizer revealed positive results on its COVID-19 vaccine. Savita Subramanian, U.S. quantitative analyst at Bank of America, believes this rotation away from tech and into stocks trading at a much cheaper price relative to earnings has only just begun, in what would be a massive change from recent market trends. She provided a list of large cap U.S. growth stocks most at risk of steep declines if market leadership changes from growth to value. Scott Barlow reports (for subscribers)

Another bitcoin bubble? This time it’s different, backers hope

With bitcoin surging to the cusp of its 2017 record high, backers are hoping fewer frenzied retail investors means less chance of a crash this time around. But with little mainstream usage as a form of payment and global uncertainty clouding financial markets, bitcoin is still far from a safe bet, analysts said. Tom Wilson and Anna Irrera of Reuters report. (for subscribers)

The 2020 Lipper fund manager awards (for everyone)

Three top dividend stock picks from the portfolio of an award-winning fund manager

Three small-cap stock picks from Mawer’s $2.5-billion fund manager Jeff Mo

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Are bonds done? Not according to these award-winning fixed income fund managers who are generating strong returns this year

Top REIT picks of award-winning fund managers as industrial real estate becomes a COVID-era investment darling

The full list of the 2020 Lipper Fund Award mutual fund and ETF winners

Others (for subscribers)

The week’s most oversold and overbought stocks on the TSX

Friday’s analyst upgrades and downgrades

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Thursday’s analyst upgrades and downgrades

Thursday’s Insider Report: CEO invests over $2-million in this large-cap dividend stock

Number Cruncher: Seven North American-listed stocks benefiting from a rebounding energy sector

Number Cruncher: Nine top-performing funds that invest in REIT portfolios

Tesla surge adds to dominance of S&P 500′s biggest players

S&P 500 dividends seen dropping only 1% in 2020

Others (for everyone)

How Airbnb’s CEO succumbed to an IPO he resisted

Globe Advisor

What role should energy have in Canadians’ portfolios?

Are you a financial advisor? Register for Globe Advisor (www.globeadvisor.com) for free daily and weekly newsletters, in-depth industry coverage and analysis, and access to ProStation – a powerful tool to help you manage your clients’’ portfolios.

What’s up in the days ahead

David Berman will tell us why expected changes in the bond market’s yield curve suggests profitable times are ahead for investors in Canadian banks.

World market themes for the week ahead

Click here to see the Globe Investor earnings and economic news calendar.

More Globe Investor coverage

For more Globe Investor stories, follow us on Twitter @globeinvestor

You may also be interested in our Market Update or Carrick on Money newsletters. Explore them on our newsletter signup page.

Compiled by Globe Investor Staff

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India Stymies Investment From Hong Kong Amid China Border Row – BNN

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(Bloomberg) — India is subjecting foreign investment proposals from Hong Kong at par with China as part of a new policy that makes approval mandatory for plans from countries that share a land border, a person with the knowledge of the matter said.

Nearly 140 investment proposals valued at over $1.75 billion, mostly from China and Hong Kong — China’s special administrative region — have been put on hold pending scrutiny, the person said asking not to be identified citing rules on speaking to the media.

Amid a border stand off with China, the Indian government tightened rules for foreign direct investment from all nations sharing a land border, making scrutiny mandatory for such investments — a restriction that was earlier applicable only to Pakistan and Bangladesh.

The delays may complicate deal-making and impact the flow of capital from private equity firms and hedge funds, which often include investors domiciled in China or Hong Kong. This may starve Indian companies of investment in the midst of the pandemic-induced economic contraction.

The curbs also apply when the beneficial owner of the proposed investment is situated in any of India’s neighbors. A government panel constituted to approve these proposals is yet to decide on the rules including on beneficial ownership.

The trade and industry ministry spokesman didn’t immediately answer a call made to his mobile phone.

READ MORE: China Gained Ground on India During Bloody Summer in Himalayas

Tensions between the two giant Asian economies have been escalating since May. Twenty Indian soldiers and an unknown number of Chinese troops were killed in clashes along the Himalayan frontier earlier this year.

The military crisis is the worst since the two sides fought a war in 1962. India responded by banning Chinese apps, tightening visa rules for Chinese nationals and imposing curbs on companies from nations sharing a land border from bidding for government contracts.

Earlier last month, Foreign Minister Subrahmanyam Jaishankar had told Bloomberg News that trade with China can’t carry on in business-as-usual mode as long as there are unresolved issues along the border — a disputed 3,488-kilometer (2,167-mile) stretch known as the Line of Actual Control.

©2020 Bloomberg L.P.

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Billionaire Bezos Backs Start-Up in Maiden Africa Investment – BNN

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(Bloomberg) — Jeff Bezos agreed to back Africa-focused financial technology company, Chipper Cash, making it his first start-up investment on the continent.

The world’s richest man’s personal venture capital fund, Bezos Expeditions, supported the Series B funding led by Ribbit Capital, which raised $30 million for the San Fransisco-based company.

“Jeff Bezo’s backing of Chipper Cash will widen the company’s product suite through inclusion of more business payment solutions, crypto-currency trading options, and investment services,” the company said in an emailed statement.

Chipper Cash enables instant cross-border mobile money transfers in Africa and abroad and will use the funds for expansion into countries it will announce in 2021. The company has 3 million users on its platform across Ghana, Uganda, Kenya, Tanzania, Rwanda, Nigeria and South Africa, and processes an average of 80,000 transactions daily, according to the statement.

“We are responding to the demand from customers on our P2P platform who also have business enterprises,” Chipper Cash Chief Executive Officer Ham Serunjogi said in the statement.

Read more: Visa Partners With Payments Startup Chipper in African Expansion

©2020 Bloomberg L.P.

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Dot Investing Launches Digital Platform Allowing Individuals to Access Investment Opportunities Usually Reserved for Institutions – Business Wire

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LONDON–(BUSINESS WIRE)–Dot Investing, a fintech startup, has launched an online investment platform that allows individual investors to invest in top private and alternative asset funds, including private equity, VC and hedge funds. Users are able to invest from £100,000 into opportunities that historically had far greater minimum investment requirements. The team behind the FCA-regulated startup want to democratise access to investments that until now have only been easily accessed by institutions.

Falling interest rates and volatile markets are driving demand from individual investors for access to top-tier private assets and alternative funds. Dot Investing is one of a small number of next generation investment platforms that provide the access and tools required to meet this demand. On the other side of the equation, the fintech startup opens the door for fund managers to a pool of capital worth trillions of pounds.

Each investment opportunity listed on the platform has passed Dot Investing’s proprietary due diligence process, combining technology and in-house expertise. Users must meet with qualifying investor criteria and make their own decisions on where to invest funds, however they do so with the knowledge that each opportunity presented has been vetted by experts. The majority of investment opportunities will come from top-tier private equity and alternative asset funds, users of Dot Investing will also enjoy regular access to ESG and impact investing funds.

Dot Investing was founded in London by a team with broad experience from a range of financial institutions including Blackrock, Barclays and JP Morgan.

Kinson Lo, founder and CEO of Dot Investing said, “We believe our technology can empower investors to build more diverse, resilient and better performing investment portfolios. Our digital platform opens access to investments that for too long have been the preserve of institutions. The combination of expertise and technology we provide arms investors with the insights to invest like a sophisticated institution.”

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