Portfolios Tilt From Canada


    Professional asset allocators have tilted their balanced portfolios away from Canada in recent years, says ‘Morningstar Manager Research Observer Canada.’ For example, over the past three years to June 30, the average allocation to Canadian equity (as a percentage of total equity) declined from 36.7 per cent to 30.7 per cent, a decrease of six per cent. This move is likely partly a strategic shift to reduce home country bias and partly a tactical underweight to Canadian equity as its attractiveness has diminished recently. Perhaps more importantly, it says, is the signal managers are giving about what they believe is an appropriate or even optimal allocation to Canadian equity in a balanced, diversified portfolio. At roughly 31 per cent, it’s almost half of what Canadians actually have invested in Canadian equity, implying Canadians should be incorporating more global equity content into their portfolios.