By Scott Ronalds
For the first time in 46 years, there are no Canadian teams in the NHL playoffs.
A jaunt down south costs 20% more than it did a few years ago.
Toronto has seen its snowiest April since 1979.
A million bucks will no longer buy you a house anywhere in Vancouver.
Alberta is feeling the impact of a lower oil price big time.
And Justin Bieber is our biggest export.
It’s a tough time to be Canadian. Don’t get me wrong. We still live in the greatest country in the world. And I’m sure the Biebs is a fine young man. It’s just that things seemed even better back when commodities were roaring, the loonie was at par, the Tragically Hip were hip, Canadian stocks were the darlings of the day, and the Sedins were still playing hockey in May. First world problems, as they say.
But we’re more upbeat on the great white north than we’ve been in a while. A cheap loonie is making our exports more compelling. A hollowed-out resource sector is creating opportunities for patient investors. And chillier sentiment towards Canadian stocks has kept a lid on valuations, making their long-term outlook more attractive.
Over the past year, we’ve been shifting towards greater Canadian content in our Founders Fund. At this time last year, Canadian stocks comprised 24% of the fund. Today, they make up 30%. Likewise, our Equity Fund has upped the dial, moving from 50% Canadian stocks last year to just under 60% presently.
As investors, we’re always looking for the right balance of companies that are at the top of their game, and those that are overlooked and undervalued. Today, many U.S. companies are flying high, while many Canadian and overseas stocks are out-of-favour. The Canadian market has been flat over the last two years, and over the last five years has returned only 2% per annum. It’s been a tough place to be. But stock markets tend to be mean-reverting over time and we think now is a good time to be more positive on Canada.