MD Remains Heavily Invested in North America Over Long-Term
MD Physician Services Inc. has increased its portfolio allocation to international equities, where it expects greater potential growth in the short-term compared with Canada and the United States.
Discussing MD’s investment strategy on the Business News Network (BNN) in Toronto, Chief Investment Officer William R. Horton, Jr. said the move is part of MD's third-quarter Tactical Asset Allocation decision, announced on September 23, 2014.
Implemented quarterly, or as market conditions dictate, MD’s Tactical Asset Allocation is aimed at increasing allocation to asset classes that present more attractive risk and return profiles, and at reducing allocation to less attractive asset classes. This way, the actively managed portfolios are positioned to capture shorter-term return potential for investors.
“The change now says that the signals we look at point more strongly towards international equities when we consider them as relative to Canadian equities,” Mr. Horton explained.
“The Tactical Asset Allocation is about how different components of the portfolio behave relative to each other. It is not an absolute decision that international equities are better than Canada or the U.S. It is that international stocks may potentially offer better opportunities than Canada and the U.S. in the short-term. We are still heavily invested in Canada and the U.S.”
In the short-term, MD has allocated 16% of its 10-year time horizon portfolio to international equities, which encompass Europe, Australasia and the Far East (EAFE). The reasons driving the decision include attractive equity valuations and a positive economic growth outlook on a relative basis.
In this portfolio, Canada represents 30% of MD’s portfolio allocation, which is part of MD’s long-term strategic position.
Also, in the latest round of tactical decision-making, MD has increased its overall weighting in equities, compared with fixed income, based on stronger macroeconomic and momentum signals.
About MD Physician Services
MD Physician Services, with more than $38 billion in assets under administration, is a wholly-owned subsidiary of the Canadian Medical Association. MD is dedicated to serving physicians and their families. MD Physician Services provides financial products and services, the MD family of mutual funds and private investment counselling services through the MD Group of companies. For a detailed list of these companies, visit md.cma.ca.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. To obtain a copy of the prospectus, please call your MD Advisor or the MD Trade Centre at 1 800 267-2332. The MD Family of Mutual Funds is managed by MD Physician Services Inc., a CMA company.
Communications Manager, MD Physician Services Inc.