CP has been a stable duopoly railroad, along with CNR, for decades. CP has been a consistent, safe compounder that can potentially provide investors with decent returns of around 12%-15% over time. In the short term, it is highly uncertain how the tariffs situation would have an impact on Canadian rails. In the worst-case scenario, tariffs could be a headwind for CP in terms of earnings and volatility in valuation. However, CP has been in business for decades under different administrations. We don’t think it would affect the economics of the underlying business because of tariffs. We think either USD or CDN is fine, however, we prefer exposure to USD as a natural hedge for Canadian investors, and due to the long-term history of a generally stronger USD relative to the CAD.
5i Research Answer: