Stan Wong, Portfolio Manager, Scotia Wealth Management
Focus: North American large caps & ETFs
Top picks: iShares Core MSCI EAFE ETF, MercadoLibre, Visa
MARKET OUTLOOK:
Equity markets have staged a strong recovery following the recent correction, with the S&P 500 Index rebounding nearly 13 per cent from the early-April lows. Investor sentiment has improved on the back of de-escalating tariff tensions, encouraging economic data, and a temporary pause on most new tariffs, which, coupled with steady job growth, has helped reignite some confidence and restore upward momentum in equities.
At the Stan Wong Group, we remain constructively optimistic on the outlook for stocks. Corporate earnings growth continues to provide a solid foundation, while the U.S. Federal Reserve’s steady rate policy – keeping interest rates in a restrictive but stable range – offers further support for financial markets. Political dynamics ahead of the U.S. midterm elections may also play a role, with potential shifts in trade tone or policy decisions aimed at supporting economic confidence. While we expect a generally positive trend, market choppiness is likely to persist, with headline risks – including unexpected tariff announcements, geopolitical tensions, and policy uncertainty – contributing to short-term volatility.
Importantly, the market’s recent rebound once again illustrates a valuable lesson – the resilience of equity markets and the importance of staying patient and disciplined during periods of volatility. History has shown that panic-driven decisions often lead to missed opportunities and long-term underperformance.
Our team continues to actively make tactical portfolio adjustments to capitalize on market dislocations. Above all, our focus is on ensuring that our portfolio mandates are well-positioned for long-term growth – regardless of short-term noise. Having a comprehensive financial plan in place also provides valuable perspective and guidance, helping investors stay focused on their long-term objectives. Staying diversified, selective, and focused on long-term objectives remains essential as we navigate the evolving market landscape.
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TOP PICKS:
iShares Core MSCI EAFE ETF (IEFA NYSE)
Provides diversified exposure to developed markets outside North America, including Europe, Japan, and Australia. Year-to-date, the MSCI EAFE Index has outperformed the S&P 500 Index, reflecting strong gains in international equities and underscoring the growth potential in these regions. Many investors have overlooked diversification beyond North America, leaving international developed markets underrepresented in portfolios. IEFA is positioned to benefit from accelerating earnings growth and increasing shareholder returns through rising dividends and share buybacks across international markets, along with favourable trends from lower interest rates and a softening U.S. dollar. Top holdings, such as SAP, Nestlé, ASML, Novartis, and HSBC, provide exposure to leading global companies across various sectors. With a management expense ratio of just seven basis points (bps), IEFA offers a cost-effective way to position a portfolio for balanced, long-term growth.
MercadoLibre (MELI NASD)
MercadoLibre (MELI) is the largest online commerce and payments ecosystem in Latin America, operating in 18 countries and offering services across e-commerce, logistics, and financial technology. Often called the “Amazon of Latin America,” MELI continues to deliver strong growth driven by its e-commerce dominance and rapidly expanding fintech platform. Revenue for 2025 is projected to reach almost US$26 billion, reflecting its scale and deepening penetration across key markets like Brazil, Mexico, and Argentina. MELI’s ecosystem advantage – combining marketplace, logistics, and payments – offers a powerful competitive moat. Its fintech arm, Mercado Pago, is growing faster than the core marketplace and is emerging as a digital banking leader across the region. The continued expansion of digital payments and broader consumer embrace of e-commerce should support a durable, long-term growth trajectory. Operational efficiencies, rising margins, and user growth all point to sustained momentum. Shares have been trending higher since mid-2022, forming an ascending pattern of higher highs and higher lows. Backed by a resilient business model, strong free cash flow, and forecasted earnings growth of about 35 per cent, MercadoLibre remains one of the most compelling growth stories in emerging markets.
Visa (V NYSE)
Visa remains a powerhouse in global payments, supported by its vast network, trusted brand, and unmatched scale. Fiscal 2025 revenue is projected to reach nearly US$40 billion, fuelled by strong consumer spending, accelerating digital payment adoption, and a continued rebound in cross-border transactions – which are particularly high-margin for Visa. While regulatory scrutiny and rising fintech competition have weighed on sentiment, Visa continues to innovate – expanding into real-time payments, open banking, and value-added services. Its capital-light, high-margin model consistently delivers strong free cash flow, funding share buybacks and dividend growth. With secular tailwinds such as the global shift from cash to digital and growing e-commerce penetration, Visa is well-positioned for sustained growth. Earnings are forecasted to grow at a 13 per cent compound annual rate over the next few years, reinforcing the company’s strong long-term trajectory. Shares have recently bounced off their 200-day moving average, presenting a compelling opportunity for investors seeking durable earnings growth and defensive characteristics.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| IEFA NYSE | Y | Y | Y |
| MELI NASD | Y | Y | Y |
| V NYSE | Y | Y | Y |
PAST PICKS: May 2, 2024
Restaurant Brands International (QSR TSX)
- Then: $101.51
- Now: $93.93
- Return: -7%
- Total Return: -4%
Home Depot (HD NYSE)
- Then: US$335.53
- Now: US$362.63
- Return: 8%
- Total Return: 11%
McKesson (MCK NYSE)
- Then: US$530.27
- Now: US$720.80
- Return: 36%
- Total Return: 36%
Total Return Average: 14%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| QSR TSX | N | N | N |
| HD NYSE | N | N | N |
| MCK NYSE | Y | Y | Y |
