Q: I am holding a substantial amount of US funds. With people getting out of US stock market and the downward trend of the American dollar, I would like to know your recommendations. Should I buy Canadian stocks, Canadian Cash ETFs or leave the funds in the US until the tariffs are settled?
5i Research Answer:
The Canadian dollar has been exceptionally strong over two weeks. But it is really not our economy: it is just benefiting from an aversion to the US. With recent tariff news (pauses) it is quite possible the US actually avoids a recession. It is too uncertain currently to call. We think some Canadian exposure is appropriate, especially for Canadian investors. We can reference our Balanced Model Portfolio or ETFs such as XIU and/or ZCN. We would seek currency diversification rather than a wholesale swap from US to Canada. The US could recover quite well if nervousness over tariffs proves unfounded.