Key takeaway: Tactically Increased U.S. Equity; Decreased Cash & Canadian Equity - Current Target Positioning as of November 16, 2016
In the weeks leading up to the U.S. presidential election, portfolio cash inflows were allowed to accumulate beyond target levels, temporarily enhancing protection against a potential increase in volatility. With the election results now determined and equity markets reacting positively to the results, the excess accumulation of cash has been deployed into equities.
Putting aside the high profile issues that have dogged his campaign, a Trump administration may have positive near term implications for U.S. economic growth through increased infrastructure spending, deregulation, and tax cuts. Even his intent on renegotiating trade agreements may result in increased U.S. inflation, leading to higher interest rates and a stronger U.S. dollar; the latter resulting in a positive exchange rate effect for Canadians investing in U.S. equities. As a result, we have tactically increased target allocations to U.S. equities.
That being said, we continue to monitor further announcements south of the border that may affect investment opportunities in our portfolios.
Empire Life Investments Inc. is the Portfolio Manager of the Empire Life segregated funds. Empire Life Investments Inc. is a wholly-owned subsidiary of The Empire Life Insurance Company.
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This document includes forward-looking information that is based on the opinions and views of Empire Life Investments Inc. as of the date stated and is subject to change without notice. This information should not be considered a recommendation to buy or sell nor should they be relied upon as investment, tax or legal advice. Information contained in this report has been obtained from third party sources believed to be reliable, but accuracy cannot be guaranteed. Empire Life Investments Inc. and its affiliates does not warrant or make any representations regarding the use or the results of the information contained herein in terms of its correctness, accuracy, timeliness, reliability, or otherwise, and does not accept any responsibility for any loss or damage that results from its use.
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