Has mentioned in the launching of our first contract as advisors, the SICAV - Optimize Invest Selection is a balanced fund portfolio oriented for long-term savings composed of equity funds and bond funds. It is exposed to shares from the Eurozone countries, Switzerland; Sweden; Russia; United Kingdom; Japan and Canada. The fund bears to European High Yield, US Dollar, American High Yield, Norwegian Krone, Swedish Krona and Japanese Yen in the bond component.
Perspectives
Like other economies, Canada has been penalised by adverse developments in raw materials. However, it already showed some weaknesses before the virus by reducing investment in the real estate and oil sectors.
Since its lows in March, the Toronto Stock Exchange has regained some colour, taking advantage of OPEC's agreement and a dozen other countries, including Russia, to cut production.
Also, investors' renewed confidence at the global level, coupled with the country's rapid and appropriate reaction, made a positive contribution.
The Bank of Canada pursued a monetary relief policy, with a reduction of the master interest rate from 1.5% to a historical minimum of 0.25%.
More recently, the authorities have left this rate unchanged (which is not expected to change until 2023). The Bank considers that an accommodative monetary policy is still necessary to support the economy and allow inflation to return to the 2.0% target, which should not happen before 2023.
With the accounts showing balance for several years, the political authorities also had enough resources to deal with the crisis.
More generally, the Canadian economy as a whole was strong enough to withstand this unprecedented double shock. The estimated fall in GDP in 2020 was 7.1%.
Strategic allocation
Despite the recent recovery, the Canadian dollar is still slightly devalued against the euro, and Canadian exporters are well-positioned to take advantage of the slower recovery in global demand. At these levels, Canadian stocks remain interesting.
So we reserve 5% of the portfolio to Canada through investment funds and ETF's of shares.
Definitions:
Mutual fund – A mutual fund is a professionally managed financial product – investment fund - that gathers money from many investors to buy securities: bonds, share or both. The advantage of this product compared to direct investment - direct purchase of shares or bonds - is that by joining many investors, the amounts available to invest considerably increase, which reduces costs and diversifies the investment (a more significant number of securities purchased).
This option is the most recommended for those who do not have much money (tens of euros are enough to invest), time to monitor the investment very regularly on a daily basis (there are fund managers who do this for you) and who have little knowledge of the financial markets.
ETFs - An exchange-traded fund is an investment fund traded on the Stock Exchange as if it were a stock. An ETF can also be called an index fund. Most ETFs track an index, such as a stock index or bond index.