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KEN GIGLIOTTI / WINNIPEG FREE PRESS

Spring forum: when, where and what

MGI Securities Spring Investors Forum

Niakwa Country Club, 620 Niakwa Rd.

Tuesday, June 14, 2:30 to 5 p.m. and 7 p.m. to 9:30 p.m.

Open to the public, but RSVP required; call Sandi at 953-440

 

Featured topics

Sure, dividend securities are boring -- what's wrong with that?

Lee Raito with RBC will discuss the results of recent research by RBC Global Asset Management on the performance of Canadian and U.S. dividend stocks. It turns out not only do dividend stocks pay you to hold them; they can offer pretty darn good price growth, too. "Companies that grow their dividends perform quite a bit better than the overall market, so we're asking him to elaborate on that theme," MGI's Stephen Watson says.

 

Fixed income investing in an era of rising interest rates

Russell Investments' Palmer Davison explains how fixed-income investors can manage the dilemma between the security of fixed-income investments and rising interest rates. The bottom line is there's a fixed income tool for whatever the interest rate climate. "One of the things we saw over the last 30 years is numerous asset classes on the equity side and we'd see one or two fixed income ideas," says MGI's Bernie Plett. "That trend has almost reversed itself." Davidson's presentation will discuss a few of the many fixed-income strategies available to investors.

 

Real estate -- investing in the path of development

Calgary-based Walton International Group's David Girard will address the economics of investing in U.S. real estate. It seems we Winterpeggers can't help but wonder if owning a piece of sand in the sunshine is within reach, Plett says. "We have one or two clients a month investigating purchasing real estate in Phoenix and Las Vegas." Girard will help satiate that thirst for knowledge, addressing the challenges and benefits of investing in sunshine-state property.

 

The Manitoba miracle

Watson says a recent feature story in Macleans magazine on the resilience of the province's economy amidst the global recession piqued MGI's interest, so they decided to get Jim Hrichishen from Manitoba's Department of Finance to discuss the economic outlook for the province. "He's effectively the chief economist," Watson says. "He knows the economy of Manitoba better than anyone."

 

Go Canada

Canoe Financial's Travis Jensen will discuss Canada's upside in the global economy. Based on Go Canada by former Fidelity chief for Canadian investment Bob Haber, the presentation will discuss the investment opportunities in Canada's commodity sectors as well as its financial services as the global economy shifts more toward emerging markets.

 

In case you're wondering

What's a closed-end fund? Part mutual fund and part exchange-traded fund (ETF), a closed-end fund is a portfolio of managed assets. But unlike a mutual fund and ETF, a closed-end fund has a limited number of units and cannot grow to accommodate new investors. Buyers can only purchase units held by existing unit-holders and that's usually done via a stock exchange, just like how an ETF trades. However, it differs from an ETF in a few ways. Usually, ETFs aren't managed, though investment firms do offer those now. In addition, ETFs trade at net asset value on an exchange -- a sum total of the market value of the fund's portfolio of assets. A closed-end fund can trade at net asset value, but its price can also reflect what buyers are willing to pay.

 

-- Investopedia

As one of the owners of the Boston Celtics, one of basketball's and pro sports' most storied franchises, it may seem strange to hear Bob Haber cheer 'Go Canada!'

The Bostonian obviously isn't cheering for the Canucks in the Stanley Cup final against the Bruins.

Granted, the former chief investment officer with Fidelity Investments Canada says we certainly have lots to be cheerful about when it comes to hockey: a Canadian team potentially winning Lord Stanley's prize for the first time in almost two decades and, of course, the NHL's return to Winnipeg.

But investors also have much to root for when it comes to Canada's economic potential -- so much so that Haber recently penned a book on the subject, entitled (as you might expect) Go Canada: The coming boom in the Toronto stock market and how to profit from it.

Haber, who worked for Fidelity for 24 years, is now a star fund manager with Calgary-based Canoe Financial, which runs EnerVest Diversified Income Trust, one of the largest closed-end mutual funds in Canada.

In fact, it's his book that partly attracted the Calgary firm's attention and establishing a series of Go Canada funds, managed by Haber's advisory firm, Haber Trilix Advisors.

Haber says he wrote Go Canada not just to help people understand how to invest in the TSX, but also to learn how they can strategically position themselves for the coming shift in global markets: emerging nations' rise to economic prominence.

"We have two and half billion people really striving to get the lifestyle we take for granted, and that means a more urban, middle-class lifestyle and the infrastructure that goes with it," he says.

"Canada is among a very small handful of places that is ready and able to meet the challenges of supplying those goods and in some cases services to these up-and-comers."

It's this Go Canada theme that also caught the interest of MGI Securities in Winnipeg and will be a topic at its Spring Investors Forum this Tuesday at the Niakwa Country Club.

Free of charge and open to the public, Winnipeggers can hear experts discuss dividend stock investing, fixed income strategies, U.S. real estate, Manitoba's economy and Canada's role as resource supplier to the emerging world.

"What we're doing is a broad-based economic forum that will have interest to Manitobans in general," says MGI senior vice-president Bernie Plett.

Each presentation will be short and sweet, about 15 minutes, so the public can ask a lot of questions.

"Our intention is not to have this as a broad-based forum with 1,000 people," MGI investment adviser Stephen Watson says. "We want people to come away with value."

That also means presenters will not be pitching investment products, Plett says.

"If they want to leave their sales information at the door for people to pick up, that's fine, but their public presentation in every case is general economics on each subject."

While the Go Canada book will be among the topics discussed, Haber will not attend the presentation. Instead, Canoe Financial's district vice-president for Saskatchewan and Manitoba, Travis Jensen, will make the presentation on Haber's behalf.

In an interview with the Free Press, however, Haber discussed why he believes Canada is the place for investors for the near and long term.

He says Canada has been well-positioned to ascend to new heights of economic prosperity for some time, even before the 2008 crash. Our federal government wasn't in deficit, and our economy was rapidly expanding. In large part, this was a result of tough public policy choices in the 1990s that saw government spending slashed to eliminate fiscal imbalances while commodity prices were very low.

"After that tough period that ended with the turn of the century, Canada found itself with an inexpensive stock market and currency and, therefore, some very cheap asset values," he says.

When the U.S. housing bubble popped in 2008, many of those gains were erased, and today Canada again finds itself in a similar position. We're back in deficit, but this time around, the economy is in better shape because commodity prices have remained high, and so the theory goes, we're more apt to grow our way out of the red faster than before, with less pain.

Another factor is cheap money floating around the globe, a result of central banks' policy to buoy asset prices. It's a similar situation to the aftermath of the tech and telecom bubble at the start of the last decade. Only now, money's even cheaper.

"It (money) can end up in some strange places," he says. "This time, it's at least partially responsible for ending up in resource stocks and commodities, and it benefits the handful of countries that have resources in the ground."

Essentially, low interest rates (cheap money) are a green light for equity investors in Canada over the near future because low rates help inflate asset prices.

"That's been the record of the last 10 or 12 years, and we haven't really changed the modus operandi," he says. "When you do that (lower interest rates to encourage economic activity) you inevitably increase volatility, too."

As a result, investors will likely see dramatic highs and lows over the short and medium terms, but asset prices will trend upward over the long term, he says. The simple fact is Canada has ample natural resources, and China, India and other emerging economies need these resources, not just to manufacture products for North America and Europe. They need them for their rapidly growing middle class that will eventually be a much larger market than ours in the West.

This transition is already well underway, but it's a global shift that will take decades to complete. Haber says the smart money is already looking at Canada as fertile ground.

"The backdrop is the strategic investors are all over it," he says, adding Asian sovereign funds are anxious to invest in Western Canada with its bounty of oil, natural gas and potash reserves.

Haber says he, too, is particularly bullish on oil and gas and potash, but agriculture and mining will also help propel Canada's stock market up in value for many years.

So, too, will gold, the world's hottest commodity, because half of the world's publicly traded gold companies are listed in Canada.

"Toronto is the money-raising capital of the gold world," he says. "For those who want to go shopping for gold equities, their first stop is Canada."

Again, increasingly enriched emerging economies will look to Canada because gold is now the alternative to the world's reserve currency, the U.S. dollar.

In the end, he says, it's really a straightforward numbers game. Demand for consumer goods will increase, inevitably stretching the finite supply of natural resources needed to produce them.

"We'll still have moments of pure pleasure and moments of pure fear," he says about the possibility of asset bubbles.

"But it's a hard theory to hold down because once the people in those countries get a taste of the middle-class lifestyle, they're not so willing to go back to the farm and subsistence living."

giganticsmile@gmail.com

Republished from the Winnipeg Free Press print edition June 11, 2011 B11