At Canada Life Investments, we have long been bearish on a number of the US technology stocks on valuation grounds. Companies such as Alphabet (Google’s parent company), Amazon and Facebook are investor favourites and amongst the largest 10 stocks in the US equity market. However, what has been behind their recent sell-off?
The LF Canlife Global Equity Fund has been managed by Mike Willans, Head of International Equities, with the support of the Canada Life Investment’s international equities team since January 2004. Mike adopts a macro-driven process, keeping a close eye on economic indicators. This includes determining the relative cyclical, growth or defensive bias of the Fund within the regional matrix.
It is normal to be seduced by headline performance figures in an attempt to judge fund quality. Typically, the industry focuses on cumulative three and five year performance figures when screening funds for selection. However, we believe there is a different way to assess processes and outcomes, the persistency of returns.
The underlying economic environment influences us all on a daily basis, whether we like it or not. Our personal finances are affected by interest rates, job prospects by economic growth and how much we can spend by inflation. The ‘real economy’ therefore has an undeniable impact on the stocks in which we invest. Understanding that impact, and positioning the CF Canlife Global Equity Fund to benefit from changes in the macro outlook, is crucial.