Chris Heakes, Senior Portfolio Manager, Harvest Portfolios Group
Focus: ETFs
Top picks: TD International Equity CAD Hedged Index ETF, CIBC Active Investment Grade Corporate Bond ETF, Harvest Low Volatility Canadian Equity Income ETF
MARKET OUTLOOK:
It’s been an eventful 2025 to say the least. Markets have rebounded impressively, with the S&P 500 up five per cent year-to-date after a sharp 20 per cent drop around U.S. President Donald Trump’s “Liberation Day” and a rapid 25 per cent recovery.
Trade policy, a major market risk under Trump, has shown signs of improvement highlighted by rumblings of a China deal but policy uncertainty still lingers. Trump’s targeting of Canada caused some weakness Friday afternoon.
Market sentiment, especially among traders, has turned more optimistic, economic data has softened and business confidence remains mixed. We haven’t seen inflation spike, due to tariffs, however this is something policy makers and the market are watching closely over the next couple months.
Interest rates have been stubbornly high at times, as inflation worries, and credit worthiness of an increasingly indebted U.S. have caused some concerns. The offset is that concerns around an economic slowdown have seen bonds rally periodically. We expect fixed income to remain volatile.
Volatility as measured by the VIX has retreated quite a bit given the more positive tones in the market. Volatility itself is quite volatile and can change relatively quickly. In the option market, we are seeing less hedging activity, which at times can be a signal of market complacency.
Overall, for the rest of the year we are looking for potentially sporadic outbursts of volatility, due to any number of reasons, economic or geopolitical. Diversification and discipline are a key focus to navigate the environment. Monetizing volatility through covered calls is something Harvest focuses on, and think can be beneficial to navigate choppy waters.
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TOP PICKS:
TD International Equity CAD Hedged Index ETF (THE TSX)
CIBC Active Investment Grade Corporate Bond ETF (CACB TSX)
Harvest Low Volatility Canadian Equity Income ETF (HVOI TSX)
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| THE TSX | N | N | N |
| CACB TSX | N | N | N |
| HVOI TSX | Y | Y | Y |
