Investment Challenges Successful investing requires time, discipline, expertise, technical knowledge, risk management and market monitoring. 2
Markets Can Be Unpredictable Number of Days the U.S. Equity Market Experienced a 1% Movement In Either Direction On average, 18% of trading days On average, 28% of trading days Number of days S&P 500 gained or lost more than 1% 160 140 120 100 80 60 40 20 0 1962 1968 1974 1980 1986 1992 1998 2004 2010 2016 Running Average Investments may be subject to larger swings more frequently. 3 Source: Bloomberg, as of December 31, 2018.
Volatility Can Lead to an Emotional Roller Coaster Risk of Making Wrong Decisions: Buy High and Sell Low 238% I am buying Confidence I am buying MORE! MORE! Optimism Euphoria Euphoria Confidence When markets are down, Confidence Optimism Denial investors panic and tend to Optimism Denial sell low. When markets are up, Capitulation investors react and tend to buy Panic Panic high. This emotional roller Investment Industry Net Sales, in Billions Sell Sell Now! coaster is evident in the Now! investment industry net sales. Industry Flows 4 Source: Bloomberg, IFIC, as of December 31, 2018.
The Result: Investors Underperform The Market An initial investment of $100,000 into the S&P 500 20 years ago would have grown to $401,694 by the end of 2017. According to Dalbar, an average investor who made buy/sell decisions in equities over the same period of time realized just $280,377. That's $121,317 less than the index return. $450,000 Market Returns $400,000 Investor Returns $350,000 Average $300,000 Investor: $250,000 Missed $200,000 opportunity of $121,317 $150,000 $100,000 $50,000 $0 3 Years 5 Years 10 Years 20 Years When investors react emotionally, they miss out on return opportunities as the market recovers. Staying invested for the long-term helps realize all potential growth. Source: DALBAR Quantitative Analysis of Investor Behaviour - 2018 Report. 5 For the period ended December 31, 2017 in USD.
Diversify Your Portfolio for a Smoother Ride Different asset classes perform differently from year to year. A well diversified portfolio can give you exposure to top performing categories, while mitigating exposure to the worst performers. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 LOWER PERFORMANCE RANKING HIGHER Canadian Small Cap Canadian Bonds Emerging Markets US Small Cap Canadian Large Cap Global Bonds Foreign Equities Global Equities US Large Cap BALANCED PORTFOLIOS Source: Mackenzie Investments and Morningstar as at December 31, 2018. Canadian Bonds: FTSE TMX Canada Universe Bond Index; Canadian Large Cap: S&P/TSX Composite TR Index; Canadian Small Cap: BMO NB SMCap Blend Wgt’d Index; Emerging Markets: MSCI Emerging Markets Index (CAD); Foreign Equities: MSCI EAFE Index (CAD); Global Bonds: Citigroup World Government Bond Index (LCL); Global Equities: 6 MSCI World Index (CAD); US Large Cap: S&P 500 Index (CAD); US Small Cap: Russell 2000 Index (CAD). Balanced Portfolio is equal weight of the indices above.
Our Changing World What Can You Do to Ensure Investment Success? Challenging Future Markets Can Be Asset Emerging Return Environment Unpredictable Complexity Technology Aging populations, fewer people Bouncing between large gains Innovation has expanded the Advances in data analytics and working, lower productivity and losses creates problematic universe of products and asset risk management help managers growth, higher government debt behaviour for most investors. For classes for investors, but more understand portfolios better. They and overvalued bond and equity older investors, large losses can options bring more complexity. also let them manage portfolios markets suggest a lower return be devastating. with more agility. market. › Investors need a multi-asset › Investors need better risk › Investors need more sophisticated › Investors need the advantages of solution to help improve returns. management. portfolio construction. technology. 7
Achieving Diversification Using Managed Solutions Sample Investment Universe Managed Solutions are multi-asset portfolios that are comprised of carefully selected Mortgage financial instruments held to build a diversified Canadian Active Equity Canadian Bond Index Backed Stocks ETFs Dollar Futures portfolio. Securities • Diversifies across asset classes, geography, High Yield Bond Index Smart Beta Inflation-linked US Dollar sectors, etc. Bonds ETFs ETFs Bonds Emerging • Accesses investment managers around the Equity Index Large Cap Equity Index Market Federal Bonds world. Futures Stocks ETFs Stocks • Dynamically adjusts allocations to take Corporate Provincial US Stocks Value Stocks UK Pound advantage of broader global market trends Bonds Bonds and developments. Emerging Small Cap Leveraged EAFE Stocks Market Japanese Yen • Manages currency exposure. Stocks Loans Debt • Uses an integrated total portfolio approach. Global Active Bond Sovereign Euro Mid Cap Stocks Growth Stocks ETFs Bonds 8
The Symmetry Experience Canada’s pension plans are considered among the world’s best managed investments. The Multi-Asset Strategies Team brings talent and some of the best practices of the pension world to the management of Symmetry Portfolios. Investment Team Alain Bergeron Andrea Hallett Nelson Arruda Blair Ireland Alex Bellefleur Michael Kapler M.Sc., CFA, CMT CFA M.Sc., M.Fin., CFA MMath, CFA M.Ec., CFA MMF, CFA • Senior Vice President • Vice President • Vice President • Vice President • Chief Economist • Associate Portfolio and Strategist Manager • Portfolio Manager • Portfolio Manager • Portfolio Manager • Portfolio Manager* • Head of Team *Subject to regulatory approval. 9
Symmetry Portfolios – Diversification and Choice Symmetry Seven Risk Targeted Multi- Symmetry Equity Portfolio Growth Class Symmetry Asset Managed Solutions HIGHER Portfolio Moderate Growth Portfolio Symmetry Balanced Each portfolio is based on a Portfolio Symmetry specific risk and return Conservative 100% Equities Portfolio profile, ranging from a set of 25% Fixed Income 75% Equities 40% Fixed Income RETURN POTENTIAL Symmetry fixed income-focused 60% Equities Conservative 50% Fixed Income Income Portfolio solutions to a full equity 50% Equities solution. 65% Fixed Income Symmetry 35% Equities Fixed Income Equities Fixed Income Portfolio Canada Canadian Government 75% Fixed Income United States Global Government 25% Equities International Canadian Investment Grade Corporates Emerging Markets Global Investment Grade Corporates Small Cap Global High Yield LOWER Smart Beta Global Inflation-linked 100% Fixed Income Global Floating Rate LOWER RISK POTENTIAL HIGHER For Illustrative Purposes Only. 10 These are the neutral allocations and the portfolios are managed within ranges as set out in the prospectus. The various geographic and other allocations will also vary.
What Symmetry Does For You With Symmetry, the heavy lifting is done for you Thinks Sources Oversees Actively Rebalances Reports About how to build an The best way to get Investments, risk By reducing or increasing Monthly on the health of integrated portfolio that exposure across asset management and allocations as required your portfolio to your seeks to maximize classes, markets and portfolio managers on and managing any advisor to keep you returns based on your countries to generate your behalf concentration risks to updated risk profile optimal risk-adjusted maintain each portfolio’s returns target risk level 11
Symmetry’s Integrated Total Portfolio Approach Uses Additional Levers to Add Value Strategic Asset Allocation Tactical Asset Allocation Currency Management Attempts to build the best performing portfolio Portfolio weights are tactically tilted to take Holistic and integrated total portfolio approach without taking undue risks. advantage of market opportunities and better to managing currency exposure. manage risk. Target Allocation Asset allocation has historically accounted for more than 90% of returns. 12
Symmetry Offers Enhanced Diversification Complements Strong In-House Teams with Leading Managers From Around the Globe Gains exposure to strategies not available in-house • Leverages the strengths and expertise of Mackenzie’s in-house boutiques • Includes custom mandates designed exclusively for Symmetry • Includes leading investment managers from around the globe • Utilizes passive instruments to improve portfolio efficiency • Seeks enhancements available from non-traditional asset classes • Trademarks are the property of the applicable investment manager and 13 used by Mackenzie under license.
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