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WAAC upgrades Canadian equities at September meeting

Published:11/10/2019


Investor Knowledge +clock5 Minutes = Confident Investing


In mid-September, the investment professionals that comprise the TD Wealth Asset Allocation Committee, also known as the WAAC, convened for their monthly session to discuss their current asset allocation views. They shared their thoughts on a variety of hot topics de jour, including major economic and political events, and opined on what they see for markets for the final stretch of 2019, and 2020.

Always a spirited and insightful discussion, the September meeting did not disappoint. Committee members debated possible outcomes to the Brexit affair, the U.S./China trade war, global central bank monetary policy and concerns over waning global growth.

At the conclusion of the meeting, the Committee made several changes to their allocation perspectives to align with their outlook for the next 12-18 months. The Committee's views are a key driver behind the portfolio construction and asset mix of TDAM "fund-of-fund" solutions (investments that hold a portfolio of several mutual funds), like the TD Managed Assets Program and TD Strategic Managed Portfolios.

The Committee voted and agreed to make the following changes:

Geography

Asset Class

Change from

Change to

Rationale

Canada

Canadian Equities

Neutral

Modest overweight

A combination of reasonable stock valuations, solid job creation and robust free cash flow generation from established names in the Energy sector.

Canada

Inflation-Linked Debt

Neutral

Modest overweight

While a significant surge in inflation is not in the Committee's forecast, inflation insurance is inexpensive for those looking to protect against a rise in interest rates, driven by a shift in expectations.

U.S.

Treasury Inflation Protected Securities

Canada/U.S.

Cash

Neutral

Modest overweight

As overnight interest rates continue to fall around the globe, the real return on cash and the optionality it provides portfolios is diminished.

The full WAAC Perspectives report which summarizes key discussion highlights from this month's meeting is now available on the TDAM News & Insights webpage. This page also gives you access to insightful and in-depth articles covering broader market and investment themes.



Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts and prospectus, which contain detailed investment information, before investing. Mutual funds are not guaranteed or insured, their values change frequently and past performance may not be repeated. Mutual fund strategies and current holdings are subject to change.

The TD Wealth Asset Allocation Committee (WAAC) is comprised of a diverse group of TD investment professionals. The WAAC’s mandate is to issue quarterly market outlooks which provide its concise view of the upcoming market situation for the next six to eighteen months. The WAAC’s guidance is not a guarantee of future results and actual market events may differ materially from those set out expressly or by implication in the WAAC’s quarterly market outlook. The WAAC market outlook is not a substitute for investment advice.

TD Mutual Funds and the TD Managed Assets Program portfolios are managed by TD Asset Management Inc., a wholly-owned subsidiary of The Toronto-Dominion Bank and are available through authorized dealers.® The TD logo and other trade-marks are the property of The Toronto-Dominion Bank.

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