A steady approach to volatile markets

Markets in 2023 were volatile and there is more economic uncertainty ahead in 2024, with continued high interest rates and talk of a potential recession. 

But with municipal budgets, especially capital and long-term reserve funds strained, there is hope.

Given that equities are key to increasing long-term investment value, Guardian Capital managers recently shared how they effectively manage this risk on behalf of municipalities in ONE's Canadian Equity Portfolio. This product is the only provincially recognized, investment option that gives any Ontario municipality any access to the Canadian equity market. It provides access to the long-term growth available from equity investments with less volatility than the broader Canadian equity markets.

Top three strategies include:

Diversification: Individual sectors and securities will behave differently in response to the same economic conditions. It’s important to choose sectors strategically to balance out these responses and reduce big swings in the overall portfolio. 

Quality investments: Investing in good quality companies and stable sectors will reduce risk. Guardian puts a premium on sectors and companies that are well managed, have long-term opportunities for growth and have  a low financial, geopolitical and legal risk profile. 

Strategic positioning: While Canada’s economy is driven by natural resources and commodities, these each represent less than 10% of the overall mix in the ONE Canadian Equity Portfolio. Although this ONE portfolio is restricted to Canadian stocks, investments decisions are based on the bigger global picture. 

With a conservative, high-quality portfolio of equity investments, the ONE Canadian Equity Portfolio posted returns higher than stock market indices and in the top 25% of all institutional funds in Canada in the 12-month period ending September 30, 2023.

Learn more by viewing the webinar.