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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.
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