FEATURES
COVER STORY: LEADING PORTFOLIO MANAGERS SUSAN ANDRIGHETTI
YOUSSEF ZOHNY
CIBC Wood Gundy
StennerZohny Investment Partners
A first vice-president at CIBC Wood Gundy, Susan Andrighetti and her team excelled amid the market volatility of 2015 and most of this year. While last year was far from a vintage period for Canadian stocks, her exposure to the US more than balanced that out. Now that the US-Canada dichotomy has turned around somewhat, her team has reacted in turn.
“I think you need an overlay on every portfolio right now to think about potential disruptors” “It’s nice that the Canadian market is finally starting to add some returns to portfolios,” she says. “The majority of returns over the past number of years has come from US dollars, US securities, dividend income and bonds. This year Canadian securities have started to kick in, and because my focus is on divided-yielding Canadian securities, it has been a good place to be this year.” Which, of course, is exactly the opposite of what was happening this time last year. “We did really well because of our exposure to the US dollar and securities, but we’ve been transferring back into Canada this year,” Andrighetti says. “My view now is that we are transitioning out of a growth market and into a value-oriented market for energy here, and you have to buy if you’re a long-term investor.” Another factor to consider is the loonie’s rally. Andrighetti believes we have probably reached a ceiling as far as the dollar’s gains against the greenback go. “I think that currency is a really important lever for the global economy,” she says. “It can create and solve a lot of problems. Here in Canada, when it went to 68 cents, that was just too low. Purchasing-power parity on the Canadian dollar is over 80 cents, but I suspect it will be hard for it to break above that level. The trading range is probably 70 to 80.” As for future investments that will keep her portfolios healthy going forward, Andrighetti identifies developments in technology as something any self-respecting money manager must keep on top of. “I think everyone needs to be thinking about disruptive technologies out there,” she says. “Look at the banks – they are all over that area right now with Fintech. Car companies, too, with the likes of Tesla. I think you need an overlay on every portfolio right now to think about potential disruptors.”
36
www.wealthprofessional.ca
Youssef Zohny has built quite a reputation in the investment business. From managing one of Canada’s bestperforming equity funds at Van Arbor Asset Management to founding his own firm at Richardson GMP with partner Thane Stenner, he’s had an impressive career arc. Today, StennerZohny Investment Partners is a key component for Richardson and its $26 billion assets under management. With $500 million AUM itself, StennerZohny has emerged as a key player in the industry. Around one-third of its portfolio is in alternatives, while the other two-thirds are divided mainly between equities and fixed income/income alternatives. This approach was borne out of careful consideration into how the markets are today and where they may be headed. “Since we started, we have actively moved most of our accounts to discretionary management,” Zohny says. “We are using more ETFs in our portfolio, which is a big component of what we do. We look at ETFs as a way to get efficient, low-cost exposure for our clients. The remainder of the portfolio is then made up of institutional-class, third-party managers.”
“One area that we have positioning in since late last year is gold and precious metals” A certain way to find yourself on the back foot in the investment industry is to fail to read the seas of change. Easier said than done, perhaps, but it is achievable. The oil shock of the past two years, for instance, was not a surprise to StennerZohny, and they moved to limit their exposure to energy before the fall really hit home. Although oil has recently rallied somewhat, the market will remain highly volatile, and as such, continues to present a big risk for investors. Where, then, has Zohny looked to find value in the markets, given the ongoing turbulence? “One area that we have positioning in since late last year is gold and precious metals,” he says. “It has been a very good performer for us. We have taken some profits there, given the significant rally, but we still have some long-term resource managers we are allocated to.” Like his partner, Zohny believes that preparing for all eventualities, good and bad, is the right course to take. “We expect there will be some choppiness in mining and commodities in general,” he says, “but over three to five years, they look cheap, so we are allocating for that. Also, short-buys and hedge strategies are opportunities we see going forward.”