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About this podcast

Stu Morrow, Vice President & Head of Investments, RBC Phillips, Hager & North Investment Counsel Inc., breaks down his team’s process to help investors maintain focus and stay the course through recent market swings. Stu also highlights the importance of diversifying portfolios beyond Canadian markets, and why a global approach can lead to long-term opportunities. (Recorded July 14, 2020)


Hello and welcome to the Download. I’m your host, Dave Richardson, and it is Stu’s days and unfortunately, Stu Kedwell, who is normally our guest on Stu’s days, is not available this week. So you’ll go, wow, maybe you can’t do Stu’s days! But I have a giant Rolodex — or I guess a contact list, in a digital world — of really smart Stus that I know. So today I’m joined by Stu Morrow, who is the V.P. and Head of Investments at RBC Phillips Hager & North Investment Counsel. Stu welcome to Stu’s days.

Great Dave. It’s great to be here on Stu’s days. It’ll be hard to fill those shoes, the other Stu’s, but I’ll do my best.

And don’t worry, if you’re great, we can replace Kedwell. So your role is really to help the investment counsellors at RBC Phillips Hager & North Investment Counsel build the right portfolios for what are generally high-net worth individuals. Can you talk about how that’s worked out through the pandemic and what you’re talking to advisors about in terms of positioning portfolios with where we are right now in the global economy?

So at RBC PH&N Investment Counsel, the investment counsellors select their products from our product shelf. So we have quite a robust product shelf that’s set by the RBC PH&N Investment Counsel Investment Committee, which I’m a part of. So I’m a part of the process which is set on a firm-wide basis. And what we’re able to do there is select the best of the best of RBC GAM and also offer third party, sub advisors, where there is a particular strategy or a style that perhaps isn’t developed at GAM. So we look to an external provider. And so throughout the crisis, we’ve actually been quite consistent with our message, which is to always take a long-term, measured approach. To always have time in the market, and not time the market. We’ve continued to stress diversification of the portfolio. That means diversification across not just the asset mix, but also across styles and regions. So stressing opportunities that we’ve seen as taking tactical calls from Dan and the team of GAM throughout Europe and emerging markets, as well as high-yield bonds on the fixed-income side. So we’ve been fairly consistent. I don’t think we’ve changed our message. We try to ensure the clients stay the course, which is what has worked out, I guess, through the March lows.

Yeah. And as we’ve talked about on this podcast several times, it’s really important for investors to put the emotions aside, to not panic in these types of circumstances, stay very rational, as you say, consistent in their approach. Now, I know you’ve got a ton of background as an analyst. And one of the things that we’ve been talking about with several of the guests is the limitations of the Canadian market. In the portfolios that you’re working with, with the counsellors, are you seeing a little bit of a reduction in the exposure to Canada due to the limitations of the market? And is that something that Canadians should be thinking about in general, in your opinion?

Yes, of course it’s top of mind. We’ve always stressed diversification beyond the Canadian borders and taking cues from other research platforms as well to say, well, there is a home country bias in most Canadian portfolios. High-net worth investors are no different in that respect. So I’ve certainly been stressing the case for increasing exposure towards emerging markets, towards different asset classes as well. So one of the benefits of our platform is, we have access to a multitude of alternative investment vehicles as well. So not only liquid alternatives, but less liquid alternatives. Access to private markets, which provides yet another layer of diversification to public equities and public fixed income markets as well. But definitely stressing the global approach is how we think about portfolio construction at RBC PH&N Investment Counsel, especially for the long-term growth opportunities that we see in those markets as well.

That’s fantastic. And for our listeners, talking about alternatives, we had Michael Kitt on last week — you might want to check in on that — who talks about real estate in this particular podcast. We’re going to have him on future episodes where we’ll delve deeper into some of the other alternatives. Stu, great job filling in here on Stu’s days. I’m sure we’ll get you back again. And I’m sure the counsellors at Phillips Hager & North are really happy to have you on board. So it’s great following your work. And thanks for your time.

Thanks for having me here. And definitely, if you want me back at any time, when Stu’s on vacation or otherwise, happy to try to fill in for him.

Excellent. Thank you.


Recorded July 14, 2020

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