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Saying no to cryptocurrency was a glorious moment for Canada’s investment advisers

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Making the right call in investing sometimes requires you to look excruciatingly wrong for a while.

The investment advisers who declined to board the cryptocurrency hype train understand this well. Bitcoin and other cryptocurrencies took off in 2020 and didn’t peak until roughly 12 months ago. Anti-crypto advisers and money managers must have hated those days of saying no to something that made so much money for anyone bold enough to dive in.

They’re over it now, though. With cryptocurrency prices collapsing, everyone in the investment advice industry who declined to trust crypto with client money is vindicated. Kudos to all for being willing to look bad in the near term so they could be right later on about what’s good for investors.

Crypto is still in its infancy and may yet turn out to be a reliable financial asset we commonly invest in or use for making payments. What advisers got right was the idea of staying away during a speculative frenzy that could only end badly. The price of bitcoin, ethereum and other coins is down by half to two-thirds or more this year. FTX, a once-celebrated crypto exchange, has filed for bankruptcy protection with debts in the billions of dollars.

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Advisers saw this coming, even while others in the investment industry viewed crypto as an opportunity. The investing app Wealthsimple Trade made crypto trading simple and accessible for individuals. A TSX-listed exchange-traded fund called the Purpose Bitcoin ETF (BTCC-T) was the first of its type in the world, and it sparked a bunch of competitors. The global giant Fidelity Investments added a tiny amount of crypto to its TSX-listed asset allocation ETFs, which are aimed at middle-of-the-road investors. The most shocking crypto foray by Canada’s investing establishment has to be an investment by the Ontario Teachers’ Pension Plan in FTX that will result in a US$95-million loss.

For the most part, though, crypto has mostly been a story of individual investors buying in on their own while advisers and money managers mainly watched from the sidelines. Back in March, 2021, I wrote a piece with the headline Why Your Investment Adviser Hates Bitcoin. I surveyed advisers on LinkedIn and found a stern resistance to incorporating it into client portfolios on the basis that it was hard to value and thus too risky.

There wasn’t even much take-up on an idea that seemed crafted specifically for advisers – that cryptocurrency would improve the diversification of portfolios by adding a component to complement stocks and bonds. In 2022, crypto’s the classic “diworsification” asset: However much your stocks and bonds are down, crypto is worse.

Resisting crypto at its peak took some conviction because prices were rising so fast. Bitcoin pretty much quadrupled from November, 2020, to the same month last year, and other cryptocurrencies soared as well. To stand against crypto as an adviser was to risk coming off like an apologist for an outdated and decaying financial system – just the sort of thing crypto investors saw themselves as rebelling against.

The pressure on advisers to accept crypto must have been intense, given how much faith individual Canadians put in the sector. “Polls seem to indicate that Canadians are more likely to be invested in crypto than American, Australian, or British households,” says a recent report from the independent analysis company Morningstar.

Recent analysis from TD Securities said the launch of crypto ETFs helped increase the level of retail investor trading in the non-core “alternative ETF” category to almost 80 per cent of total volumes from 40 per cent early last year.

The Purpose Bitcoin ETF hit $1-billion in assets in March, 2021, a phenomenal achievement for an investment product just one month old. The latest numbers show the fund lost about 70 per cent for the 12 months to Oct. 31, with assets down from March, 2021 levels by half. Thank an adviser today if they saved you from getting caught up in this decline.

Did you roll the dice and invest in crypto during the pandemic? We want to hear how your thoughts on crypto have changed – or stayed the same. E-mail Globe reporter Salmaan Farooqui at sfarooqui@globeandmail.com to share your story.

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Abu Dhabi Hosts Annual Investment Meeting May 2023

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ABU DHABI, United Arab Emirates — Abu Dhabi will host the 12th edition of the Annual Investment Meeting from 8 to 10 May 2023, which will take place under the theme of “The Investment Paradigm Shift: Future Investment Opportunities to Foster Sustainable Economic Growth, Diversity, and Prosperity”.

At a press conference held today in Abu Dhabi, the announcement of the launch of AIM Global 2023 which is supported by the Ministry of Industry & Advanced Technologies, with the Abu Dhabi Department of Economic Development (ADDED) as a lead partner was made in the presence of H.E. Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, Vice Chairman of the UAE Industry Development Council and H.E. Mohamed Ali Al Shorafa, Chairman of ADDED.

AIM Global 2023 pillars will discuss the global capital market transformation, ways to improve the flexibility of global supply chains to benefit from growth opportunities, and the Fourth Industrial Revolution & AI technologies in the years to come.

AIM will also address new trends in the current global digital transformation that’s being experienced by developing & developed economies. AIM Global 2023 will feature many sessions & workshops that discuss vital topics, including Future Cities, how to use innovative technologies to address the increasing demands, the business sector’s ability to keep abreast of the fast changes, and the future role of Startups & SMEs.

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H.E. Dr. Thani bin Ahmed Al Zeyoudi, lauded AIM’s ability to change its activities to keep abreast of the new changes in the global economy and praised AIM Global 2023’s gathering of all investment stakeholders in an effort to overcome the current obstacles to achieve sustainable economic development & prosperity for the world via several paths, including Digitization, Sustainability, Industrialization, and Free Trade.

H.E. Mohamed Ali Al Shorafa said: “We’re pleased to host AIM 2023 in Abu Dhabi, which has established its position as a preferred destination for business & investments due to its proactive, open approach in dealing with changes. AIM is a suitable platform to discuss new trends and ways to deal with changes and developments in the global economic landscape.”

AIM will comprise several features, including the Exhibition, Investment Roundtables, Investment Destinations Presentations, Investment Awards, Startups Awards, Investors Hub and G2G, G2B & B2B Meetings.

*Source: AETOSWire

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AI will continue to attract investment in near future in the healthcare industry

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Artificial intelligence (AI) was seen as one of the top current investment priorities and was thought to continue to attract investment in the healthcare sector in the upcoming two years, according to GlobalData’s latest report ‘Digital Transformation and Emerging Technology in the Healthcare Industry – 2022 Edition’.

In this survey-based report tracker, digital media was prioritised as a top current investment target, with 53% of surveyed respondents confirming that their companies are currently investing in this technology. It was followed by AI, social media and big data (Figure 1). Compared with last year’s data, digital media saw the biggest increase in current investment, up by 22% from last year. AI (+9% from 2021), social media (+8%) and big data (+5%) have also gained since last year, besides trending as very popular technologies for investment priorities for several years. Their combined usage can release synergetic power and potential that could be disruptive to the healthcare sector.

While digital media was selected as the number one current investment target, the percentage of companies investing in this technology is expected to drop by 16% over the next two years. This would likely be due to the current inflation and rising costs, which contribute to a gloomy investment environment. In the next two years, the surveyed healthcare industry professionals believed that their companies will prioritise AI as the main investment target (figure 2).

Having topped the chart as the most attractive investment target since 2018, AI is a rather versatile technology that can be applied in a wide spectrum of processes in the pharmaceutical value chain, making processes faster and more efficient; eventually saving time and labour costs.

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The technology has a multititle of applications; for example, companies like Exscientia are using AI to help their pharmaceutical clients analyse vast data sets to identify potential drug targets in a shorter time. K Health, in its AI-based telehealth app, is using AI and big data to help users access accurate information on their symptoms and connect with physicians; BioSymetrics is using AI and machine learning to provide a platform and models to help pharmaceutical companies to identify targets for drug discovery; while Bayer’s AI-enabled Calantic™ Digital Solutions platform, which combines AI with Cloud computing, is used to provide more structured tasks and more improved workflow, to ease workload and pressure for radiologists.

The new digital era has been driving the uptake of digital technologies. Technologies like AI are expected to bring disruptive power to and revolutionise processes within the healthcare sector. There has been an increasing number of successful AI-use cases in the healthcare industry that support a growing trust in AI. AI’s potential is substantial – not only limited to shortening the time and reducing cost in the drug discovery process, or providing healthcare professionals with faster and more accurate diagnoses.



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Responsible Investment Industry in the Midst of Remarkable Evolution

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TORONTO — The responsible investment industry is in the midst of a remarkable evolution, according to new data from the 2022 Canadian Responsible Investment (RI) Trends Report. Released today by Canada’s Responsible Investment Association (RIA), the report tracks the national trends and outlook for RI, which refers to investments that incorporate environmental, social, and corporate governance (ESG) issues into the selection and management process.

This year’s report confirms that RI’s recent momentum is giving way to demand for sophistication and more vigilant reporting, signaling a maturing industry. Over the past two years, the rush into RI claims has been met by forces both external and internal to the financial industry, including the reputational and legal risks associated with greenwashing and lack of clarity around ESG industry terminology and disclosure requirements.

With its updated methodology, the report affirms that RI is entrenched in Canada, with reported assets under management at $3 trillion, and 94% of respondents using ESG integration as an RI strategy. This marks the emergence of a reliable baseline for RI market share and demonstrates that ESG Integration is a fundamental tool in Canadian investors’ decision-making.

“Greater vigilance is redefining the ‘floor’ of RI assets under management. Increased clarity and alignment are necessary to shape the slope and raise the ceiling,” said Patricia Fletcher, CEO of the RIA. “RI is here to stay, but we have work to do with everyone in the investment ecosystem to get the next steps right in order to propel further growth.”

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Growth expectations overall remain strong with 90% of respondents anticipating moderate to high levels of growth over the next two years. The demand for sophistication and vigilance is further reflected in investors’ future outlook, with respondents citing the top three potential deterrents to RI growth as: (1) mistrust or concerns about greenwashing, (2) a lack of standardized ESG disclosure frameworks/standards, and (3) lack of reliable data.

The report found an increase in the prevalence of all other RI strategies in addition to ESG integration, including corporate engagement, positive and negative screening, and thematic and impact investing, further pointing to the growing RI sophistication of Canadian investors. Respondents cited risk management as their top motivation for considering ESG factors.

Additional Highlights

  • Survey respondents reported the top three reasons for considering ESG factors are: (1) to minimize risk over time, (2) to improve returns over time, and (3) to fulfill fiduciary duty.
  • The three most prominent RI strategies by AUM are: (1) ESG Integration, (2) Corporate engagement & shareholder action, and (3) Negative/exclusionary screening.
  • Climate change is an overwhelming concern for responsible investors–-who also believe it is the greatest driver for growth over the next two years.

View the report here.

Quotes from 2022 Canadian RI Trends Report Partners:

“The evolution of responsible investing is a natural and expected process that is beneficial both to investors and the industry,” said Roger Beauchemin, President and CEO of Addenda Capital. “Several trends are helping to strengthen practices: investors’ growing appetite for data on environmental, social and governance (ESG) issues, pressure on companies to improve transparency, and industry efforts to define and meet standards in sustainable investing.”

“As the definition of responsible investing matures and the collective knowledge of our industry continues to increase, we are encouraged to see significantly more respondents turning to thematic approaches and to hear that a desire to address key issues like climate change will continue to drive growth over the next few years,” said Karrie Van Belle, Chief Marketing & Innovation Officer, AGF Investments Inc.

“We are incredibly proud of the progress that Canadian investors are making to deliver more transparency, a diversity of responsible investment solutions, and better client outcomes,” said Fate Saghir, SVP, Head of Sustainability, Mackenzie Investments. “This report reinforces Canada’s ambition to lead in the future low-carbon, equitable, and prosperous economy, and we at Mackenzie, are humbled to participate in this journey on behalf of our clients.”

“We are inspired by the level of attention investors are paying to climate factors. What’s more, the relatively low use of impact investing revealed by the report suggests there is untapped opportunity to leverage investment portfolios to reduce global carbon emissions,” said Adelaide Chiu, VP, Head of Responsible Investing & ESG Services. “We look forward to helping Canadians seize the opportunity to make an impact as they pursue their financial goals.”

“RBC Global Asset Management is proud to collaborate with the RIA Canada and support its efforts to build greater awareness of ESG trends and issues facing the investment community,” said Melanie Adams, Vice President and Head, Corporate Governance and Responsible Investment, RBC Global Asset Management. “Primary research, such as the 2022 Canadian Responsible Investment Trends Report, plays an important role in helping educate Canadian investors and advisors about responsible investment trends and sentiment.”

About the Canadian RI Trends Report
The RIA publishes the Canadian Responsible Investment Trends Report to understand and assess the characteristics of responsible investment in Canada. This study was completed by Environics Research on behalf of the RIA. The results are based on input from organizations invited to participate in an online survey between August 2nd and September 29th, 2022 as well as desk research completed by the RIA. All figures are stated in Canadian dollars as at December 31st, 2021. The 2022 report was generously sponsored by Addenda Capital, AGF Management Limited, Mackenzie Investments, NEI investments, and RBC Global Asset Management.

About the Responsible Investment Association (RIA)
The RIA is Canada’s industry association for responsible investment. The RIA’s membership includes asset managers, asset owners, advisors, and service providers who support its mandate of promoting responsible investment in Canada’s retail and institutional markets. RIA institutional members collectively manage more than $42 trillion in assets. Learn more at www.riacanada.ca.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221123005078/en/

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Contacts

Nick Buccheri
Director, Operations
Responsible Investment Association
nick@riacanada.ca
+1(416) 461-6042 x5

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