Insurance, Investments and Group Benefits

From the desk of CIO Paul Holba: In this latest update from the Empire Life Investments team, Paul Holba discusses how 2022 continues to be a challenging year—but it’s not all bad news.

Market recap

2022 continues to be a challenging year for investors. As mentioned in my July update, the first half of the year produced some of the worst year-to-date returns in decades for many markets. At the end of the third quarter, market returns continued to incrementally trend in the wrong direction (albeit at a slower clip). However, many markets experienced a strong October rally, trimming the year’s losses to varying degrees. Supported by its resource sector orientation, Canadian equities held their value better over other markets, while the growth-oriented Nasdaq Composite continued to lag materially.

From the desk of CIO Paul Holba: In this latest update from the Empire Life Investments team, Paul Holba reviews the key market events impacting 2022 and beyond.

The first half of 2022 was turbulent, with major asset classes suffering from their worst first half of a year in decades. The year began with the world’s uneven emergence from the pandemic and supply chain disruptions affecting the global economy. Russia invaded Ukraine in February, spurring a major geopolitical event that pushed up prices of commodities, including energy and agricultural products. China’s zero-COVID policy has suppressed demand, weakened productivity, and spilled over into global supply chains.

Corrections: What we can learn from the past - May 25, 2022. The Investments team looks at previous market corrections through the decades, the events that followed, and why staying invested through bouts of volatility has proven to be a beneficial strategy for the long-term investor.

Market watch bulletin - February 28, 2022: Given the current geopolitical situation here are a few thoughts from our investment team.

The situation is changing very rapidly in Ukraine, so we won't try and update you on the moment-to-moment situation.

Let’s start by extending our sincerest best wishes to the people of Ukraine. We can't imagine what it feels like to wake up to a terrifying situation that must have felt inconceivable a couple of months ago and realize that your life and that of your family are in danger. All our thoughts and prayers are with them.

From the desk of Ashley Misquitta: In this recent article, Ashley Misquitta reviews the key market events impacting 2021 and beyond. 

Transition was clearly a dominant theme over the past year. Transitioning from the unprecedented COVID-19 lockdowns of 2020 and early 2021, global economies began to ease restrictions as vaccines were rolled out in the spring, driving greater economic activity across many sectors. And we saw many other important transitions occur as well.

Key takeaways: Tactically increased bonds, decreased international equities*

Tactical update - January 27, 2022

We are taking a slightly more defensive posture by trimming international equities and adding to bonds. This is indeed a tactical, but measured decision. It is a move in a more conservative direction with an eye towards taking potential risk exposures incrementally lower.

Key takeaways:

Emblem Portfolios - Canadian: September 22, 2021
Emblem GIF Portfolios - Global: September 27, 2021

• Incrementally less aggressive outlook/positioning towards risk assets
• Deploying cash to realign select asset class exposures back to targets
  
  

Highlights:

• Strong sustainable investing interest in the current environment
• Record fund flows into Canadian sustainable investment funds
• Wide interest/usage gap and demographic factors allude to potential for greater fund flows
• Discussion and education will be important drivers going forward

From an evidence point of view, the proliferation of sustainable investment strategies and strong fund flows into these products are easily researched through publicly available resources. Underlying these trends, however, is a more durable structural shift.

Myth #3: Sustainable investing is a fad

Myth #2: All sustainable investing approaches are essentially the same

It is vital in understanding the different approaches related to sustainable investing. While standards and definitions continually evolve, there are generally six approaches to sustainable investing. Depending on an investor’s motivation in considering sustainable investing, some approaches may be more relevant than others.