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Stephen Carlin, managing director and global head of equities, CIBC Asset Management.

In terms of our outlook for the Canadian marketplace, we continue to like the overall outlook for the Canadian banks, and specifically we would highlight names like both TD Bank and Bank of Montreal. What makes those ones a little bit different would be the exposure to the U.S. business that differentiates them from some of the other banks. Both TD and Bank of Montreal have notable exposure to the U.S. portion of the businesses, and those have been growing quite nicely, and that’s what helps to differentiate the view between those two.

I would also highlight, too, that one of the very interesting aspects of the banks, and not something ever to forget for investors, is of course the attractive dividend yield. The overall bank sector is currently yielding at approximately 4.3%, and relative to the interest rate environment and our outlook, the overall outlook for the banks, we continue to see an attractive upside potential there.

Within the financial services sector, too, we also very much like the long-term outlook for Brookfield Asset Management and some of the subsidiaries.

Brookfield Asset Management, from our perspective, is a very attractively positioned asset manager. They continue to grow their assets under management. They have notable, sizable scale advantages. They just announced an acquisition in calendar Q1 of Oaktree, which we think will drive very attractive long-term synergies for the overall business.

Importantly, why we like the Brookfield business, especially in the environment we’re in right now, is a large proportion of its business is fee-based, fee-driven and, as such, we think that they’ve got long-term embedded growth and attractive growth right now, that, currently, we believe is not trading at a price that reflects a full value. So, we see attractive upside potential in Brookfield Asset Management.

Within the the Brookfield family, I would also highlight, for investors who are a little bit more attracted to dividend yield, while we like the overall Brookfield Asset Management business, one particular subsidiary that we highlight is Brookfield Infrastructure Partners. Its dividend yield is currently around 4.8%, and when we look at the overall value for the business, and we look at this from a total return perspective, and as it as it leverages the strengths that the overall Brookfield Asset Management infrastructure can help for the long-term growth of this business, we think there’s lots of legroom for growth. We’ll highlight that one as well.

Lastly, just on names or sectors that we like, we continue to like specific segments of the real estate sector. We’re highlighting the multi-family, multi-residential, specifically highlighting Canadian Apartment Properties, which has a good combination of strong rent fundamentals underlying the prospects for the business. Of course, there, too, we’ve been talking a lot about dividend yield. Canadian Apartment Properties offers a very attractive dividend, so a total return with the growth in rents and the dividends that investors see there, we remain attracted to that.

Where we would be a little bit more careful, or cautious on, would be segments of the market that look like the prospects are deteriorating. One area that I would highlight would be in the area of auto parts. We continue to see weakness in the overall demand picture for autos, and automotive new car sales. Notably, we’re seeing some strong weakness in some of the Asian markets, so we would be a bit careful on that. While we are very familiar with the company called Magna—it’s a high-quality company—but unfortunately right now it’s stuck in a sector where the fundamentals are a little less desirable than some of the other areas that we see in the marketplace today.

CIBC Canadian Equity Fund
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