Client Protection
Customized Solutions
Book An Introductory Meeting

Q1 2021 - Investment Update

Global stock markets got off to a good start in 2021 with most markets rising quickly for the first 6 weeks of the year. What followed was a sell-off lasting nearly 3 weeks as markets re-treated before stabilizing and recovering later in March.

Bonds had a poor start to the year, reversing all the gains they made in 2020, with the Canadian Universe Bond Index falling 5.60% for the quarter. With more economies poised to reopen later this year, the three major central banks (Japan, Europe, and the USA) all indicated they would allow inflation to run higher, thereby keep their monetary policy “easy” to support markets.

The Canadian dollar (CAD) continued to appreciate during the quarter moving about 1% higher in conjunction with rising oil & gas prices. This will continue to be a headwind for Canadian Dollar investors in the near term, however, an 80 cent dollar is certainly reasonable in the long term.

Interestingly, we also saw a large dispersion amongst equity sectors with cyclical sectors such as Financials, Industrials, and Energy stocks outpacing growth sectors such as Technology and Healthcare (biotech). With economies expected to reopen in the summer and/or fall, the shift in investor focus from Growth to Value stocks could very well be underway.

In our Balanced and Growth model portfolios, we responded by exiting some of our more defensive holdings, like cash (CAD) and Loblaws, and moved into quality companies that are more cyclical, such as Air Canada and General Motors. In addition, the manager of Fidelity’s Global Innovators Fund, Mark Schmehl, indicated a similar shift within his fund away from some high growth names like Zoom, Tesla and Shopify, and into Electric Utilities and Travel stocks.

On a lighter note, the stranding of the Ever Given container ship in the Suez Canal was viewed by many as a welcome distraction from the daily COVID news coverage.

To say that this is an important trade route would be a phenomenal understatement. About 10% of global trade passes through the humanmade Suez Canal, which connects the Mediterranean Sea with the Indian Ocean, cutting off more than 7,500km for a trip from London to Mumbai.

We all know time is money, but for the Suez Canal, that saying holds particularly true. Around 50 container ships pass through the waterway every day, with an average toll fee of around $300k USD per ship. That means every day the passage is blocked is potentially $10-15m of lost fees, not to mention the delays and costs incurred by the waiting ships, which likely runs into the many millions as well.

If your Amazon packages take a few extra days this month, you may not be the only one feeling the burn!

Have a great day.


-The Gilman Deters Team

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by HarbourfrontWealth Management Inc.”

This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity. As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. Laws and regulations are continually changing, and their application and impact can vary widely based on the specific facts involved and will vary based on the particular situation of an individual or entity. Prior to making any decision or taking any action, you should consult with a professional advisor. The information is provided with the understanding that Harbourfront Wealth Management is not herein engaged in rendering legal, accounting, tax or other professional advice. While we have made every attempt to ensure the information contained in this document is reliable, Harbourfront Wealth Management is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or as to the outcome to be obtained from the use of this information, and is without warranty of any kind, express or implied. The opinions expressed herein do not necessarily reflect those of Harbourfront Wealth Management Inc. The particulars contained herein were obtained from sources we believe to be reliable but are not guaranteed by us and may be incomplete. The opinions expressed are not to be construed as a solicitation or offer to buy or sell any securities mentioned herein. Harbourfront or any of its connected or related parties may act as financial advisor or fiscal agent for certain companies mentioned herein and may receive remuneration for its services. The comments and information pertaining to any investment products (The Portfolios) sponsored by Willoughby Asset Management are not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of units of The Portfolios is made pursuant to the Offering Memorandum or Simplified Prospectus and only to investors in Canadian jurisdictions. Important information about The Portfolios is contained in the Offering Memorandum or Simplified Prospectus available through Willoughby Asset Management. Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with investments in The Portfolios. Investments in The Portfolios are not guaranteed, their values change frequently, and past performance may not be repeated. Historical annual compounded total returns including changes in unit value and reinvestment of all distributions do not take into account sales, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Unit values and investment returns will fluctuate and there is no assurance that The Portfolios can maintain a specific net asset value. Harbourfront Wealth Management Inc. (“Harbourfront”) has relationships with related and /or connected issuers, which may include the securities or funds discussed in this commentary and are disclosed in our Statement of Policies Regarding Related and Connected Issuers. This policy is included in your new client package, on our website, or can be obtained from your investment advisor on request.