YLDE - ClearBridge Canadian Dividend Plus Strategy Q1 2024 Commentary

2024-04-27 12:50:00 ET

Summary

• ClearBridge is a leading global asset manager committed to active management. Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• North American equity markets kicked off 2024 with a robust first-quarter advance, building on the solid returns registered in 2023.
• Volatility in oil and natural gas commodities was mirrored by volatility in the stocks, providing trading opportunities.
• We believe valuations of some equities are embedding uncomfortably high expectations for profitability in the year to come, and our bottom-up process and fundamental approach to valuation positions us well in this environment.

By Ryan Crowther, CFA & Les E. Stelmach, CFA

Cost of Capital Critical for Stocks in New Regime

Market Overview

The Canadian equity market kicked off 2024 with a robust 6.6% first-quarter advance, building on the solid 11.8% return registered in 2023. In fact, equity market returns accelerated throughout the quarter with strength in March helping propel the S&P/TSX Composite TRI to new all-time highs. That said, gains in Canadian equities continue to pale in comparison to the ongoing boom in U.S. equities, with the S&P 500 ( SP500 , SPX ) TRI returning 13.3% (in Canadian dollars) in the first quarter on top of 23.3% in 2023 — a large portion of these gains derived from mega cap information technology ('IT') and related names....

For further details see: