De Verteuil notes that stability is very much on the minds of investors. Noting that the first question is whether they’ll get better returns, he said, “The way I answer it is: ‘If you don’t get better returns, there’s no evidence you screw up’.” Therefore, it is a positive if they can invest in ETFs that use very reputable third party vendors and have been studied by many analysts for governance, social issues, climate and use of water and plastics.
“If you can find ETFs that give you market-type returns, but at the same time provide stability for our society, I don’t see how these things wouldn’t be interesting and useful for large segments of the population. ,” he said, “and I think it will continue”.
De Verteuil viewed banks particularly favorably in Canada, and noted that they showed a tremendous spread compression. But, they expect that they will continue to revisit the loan side as rates will rise and deposits will also go up for a while. “So, this is an environment where banks have been able to normalize their profit margins,” he said.
“A little exposure to gold is not a bad thing. I don’t expect the world to collapse anytime soon, but I think historically, gold has been a good protection against inflation,” he said. Given that although it is not much needed, it can help. Fed pullback.
De Vertueil isn’t expecting big returns from equities this year, though he expects them to outperform fixed income. Options in private equity, private debt and infrastructure are attractive when there is a modest return on equity and fixed income. He is expecting a hike in interest rates, and added that keeping some cash is also important for liquidity.