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The leading players in global equities Canada underperforms as AI and the US take top spot for global equities, but the fundamental tenet of diversification remains key
WHEN IT comes to the global equity landscape, “The US has been the place to be,” says Bimal Patel, senior fund manager for Canada Life Asset Management in the UK office. Canada has underperformed, which can be largely attributed to the composition of the Canadian benchmark, which is heavily skewed toward value sectors such as financials, energy, industrials, and materials. “Financials is about 35 percent of the overall market. It’s quite significant, whereas technology, for example, it’s only about 10 percent,” Patel explains, pointing out that the Canadian and UK markets are strikingly similar. The US market, in contrast, has been buoyed by the dominance of its technology sector, which has driven much of the global market’s performance in recent years. “It’s very roughly 30 percent tech and maybe 13 percent financials, instead of [Canada’s] 30 or 35 percent financials.” However, Patel suggests that this regime may be shifting, placing a lot of focus on AI. “I suppose there is a possible broadening out of the US market, not the global market. If US tech stops going up exponentially, as it has been doing, that will help other regions’ financials,” he says. In many ways, it’s a US versus ex-US kind of environment, Patel believes, because
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