YLDE - ClearBridge Canadian Plus Equity Strategy Q4 2023 Commentary
2024-02-25 04:40:00 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.
- Canadian and U.S. equities surged in the fourth quarter, as market attention pivoted from expectations of interest rate increases to the potential for rate cuts in 2024.
- Although the Strategy generated a strong absolute return in the quarter, it underperformed its broader North America equity benchmark largely due to stock selection effects, primarily in Canadian information technology and U.S. health care.
- We have become more constructive on defensive sectors that bore the brunt of higher interest rates for most of the past year, including communication services, utilities and real estate as well as the midstream/pipelines portion of the energy sector, and will continue to seize on opportunities in these areas as they arise.
By Garey J. Aitken, CFA, & Timothy W. Caulfield, CFA
Market Overview
The S&P/TSX Composite Total Return Index returned 8.1% in the fourth quarter. Benchmark 10-year interest rates in Canada and the U.S. reached 2023 highs of 4.24% and 4.99%, respectively, in October before ultimately giving way in the final two months of the year to close at 3.11% and 3.88%. Following a U.S. Federal Reserve meeting in December that highlighted easing inflation and slowing economic growth, rates priced in a more dovish consensus....
ClearBridge Canadian Plus Equity Strategy Q4 2023 Commentary