Richard Orrell’s Top Picks for April 2, 2026

Richard Orrell, Portfolio Manager, RN Croft Financial Group

Focus: Exchange-Traded Funds (ETFs)

Top Picks: iShares S&P/TSX Composite High Dividend Index ETF, Vanguard FTSE Developed ex North America High Dividend Yield Index ETF, Global X 0-3 Month T-Bill ETF

MARKET OUTLOOK:

The start of 2026 has been defined by a growing list of global uncertainties. While we entered the year bracing for volatility ahead of the U.S. midterm elections, the narrative has shifted from a “soft landing” to a series of acute macro shocks.

The shift in interest rate expectations

The initial consensus for two to three rate cuts by the U.S. Fed has vanished. With a new Fed Chair in the wings and a conflict in Iran triggering an oil price shock, markets are now pricing in zero cuts well into 2027—with a tail risk of rate hikes.

Simultaneously, the “AI story” continues to evolve and the potential SpaceX’s initial public offering (IPO) is poised to fundamentally redraw major indices. We are seeing a divergence in credit markets; private debt tied to software companies is suffering as artificial intelligence (AI) giants like OpenAI and Anthropic disrupt legacy models. Furthermore, real estate funds are increasingly halting redemptions to protect valuations and stem outflows. ETFs continue to provide the essential liquidity investors need to navigate these markets.

The Canadian defensive play

Despite a nine per cent pullback from all time highs, the Canadian market remains a global standout. Our resource-heavy composition has acted as a natural hedge:

• Energy: Buoyed by Middle East tensions.
• Gold: Holding firm despite broader volatility.

Investor takeaway

The recent bounce in the S&P 500 must be weighed against the volatility index (VIX) to see if calm is truly returning. For now, this appears to be a natural equity market reset—a standard feature of the investment cycle rather than a systemic panic.

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TOP PICKS:

iShares S&P/TSX Composite High Dividend Index ETF (XEI TSX)

Most Canadian investors already have excess exposure to the Canadian market but in the case where you’ve been primarily positioned in the U.S., XEI is a good place to put your money to work for the long term. Between the energy and financials exposure, you’re getting a lot of the top Canadian stocks at a reasonable management expense ratio (MER) of 0.22 per cent. This ETF could also help in a situation where you don’t want to impact your existing cost base by comingling another purchase in an existing dividend ETF in your portfolio.

Vanguard FTSE Developed ex North America High Dividend Yield Index ETF (VIDY TSX)

This ETF focuses on international companies that are characterized by high dividend yield that are not domiciled in Canada and the United States. The countries with the highest weights are Japan, United Kingdom, Switzerland and Australia. The MER is 0.32 PER CENT. This a good ETF to round out global exposure and the focus on yield will provide some income with a highest weight being financials.

Global X 0-3 Month T-Bill ETF (CBIL TSX)

This ETF holds 0-3 month Canadian treasury bills which are considered a very safe investment. It’s a good place to park any cash from any trading profits while deciding on your next move. This ETF may also be used to convert CAD to USD and vice versa. If you’ve recently sold property in the U.S. and want to change American dollars (USD) to Canadian dollars (CAD), you can buy CBIL.U in a U.S. trading account, move it to a CAD trading account and sell CBIL. You’ll find the spread you pay is much lower than the banks.

PAST PICKS: MARCH 10, 2025

Invesco S&P 500 Equal Weight Income Advantage ETF (EQLI TSX)

Then: $21.13

Now: $20.79

Return: -2%

Total Return: 8%

BMO MSCI USA High Quality Index ETF (ZUQ TSX)

Then: $87.12

Now: $95.49

Return: 10%

Total Return: 10%

Vanguard Canadian Ultra-Short Government Bond Index ETF (VVSG TSX)

Then: $50.38

Now: $50.31

Return: -0.13%

Total Return: 3%

Total Return Average: 7%