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Yann Furic
B.B.A., M. Sc., CFA

Senior Portfolio Manager, Asset Allocation and Alternative Strategies

Long wait

The presidential election of November 3 shook the United States, which emerged more divided than ever.

As no winner could be confirmed that evening, the whole world stood in wait for several days until a result was confirmed.

No blue wave on the horizon

By the next morning, however, it became clear that the blue wave anticipated by some media would not materialize, since all indications were that the Democrats would maintain their majority in the House of Representatives and that the Republicans would retain control of the Senate.

This scenario was well received by the stock markets. A change in the presidency, combined with a Republican-majority Senate, is a scenario that will curb the most unpopular measures promised by the Democrats, such as raising corporate taxes.

A Democratic administration constrained by a Republican Senate will also have to limit the size of a government fiscal aid package and thus restrict the issuance of debt and the future level of inflation, which leads to lower long-term rates and favours growth stocks at the expense of value stocks.

Vaccine on the horizon

Last week, the pharmaceutical company Pfizer announced preliminary test results for its COVID-19 vaccine, which is estimated to be more than 90% effective. This news surprised the markets, which did not expect results to be announced so soon, let alone such a high level of efficacy.

This good news was received positively by the markets, as it opens the door to a possible return to normalcy after months of special restrictive measures.

A second announcement, on November 16, by the Moderna company of a vaccine with an efficacy of 94.5%, added to this first breakthrough.

Market movements

Global stock indices all rose, and a cyclical rotation began. Economic recovery stocks, which are more cyclical, benefited from the latest pharmaceutical advances, at the expense of growth stocks and those relating to telework, particularly technology issues.

The production and distribution of a vaccine will dictate the reopening of economies. It appears at this time that the doses available in 2021 (based on a two-dose vaccine), will be insufficient for a return to normal life in the next six to twelve months.

In the meantime, Europe and now North America continue to see a rise in the number of hospitalizations, precipitating the implementation of different lockdown measures, depending on the severity of each situation.

Our strategies in response to these developments

In the aftermath of the election, we tactically increased the weighting of equities, a divided U.S. government and low interest rates making the return expectations for stocks more attractive than those for bonds over a six to twelve month horizon.

We are also maintaining our Barbell positioning, a strategy in which we continue to hold the assets that have so far performed best during the pandemic, namely technology stocks, while at the same time holding stocks that will benefit from the economic recovery, such as those in the industrial products sector.

In all cases, we remain vigilant and proactive. We will adjust our positions on an ongoing basis as the situation evolves.

If you have any questions about this article or the performance of your portfolio, feel free to contact your advisor, your best resource for the overall management of your assets.


Yann Furic B.B.A., M. Sc., CFA
Senior Manager, Asset Allocation and Alternative Strategies

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The Morningstar Risk Adjusted Return (MRARs), commonly referred to as the Star Rating, relate the risk-adjusted performance of a fund to its peers with the same CIFSC (Canadian Investment Fund Standards Committee) Fund category for the period ended as noted and are subject to change monthly. The ratings are an objective, quantitative measure of a fund’s historical risk-adjusted performance relative to other funds in its category. Only funds with at least a three-year track record are considered. The overall star rating for a fund is a weighted combination calculated from a fund’s 3-, 5- and 10-year returns, as available, measured against the 91-day treasury bill and peer group returns. A fund can only be rated if there are a sufficient number of funds in its peer group to allow comparison for at least three years. To determine a fund’s rating, the fund and its peer are ranked by their MRARs. If a fund scores in the top 10% of its category, it receives five stars (High); if it falls in the next 22.5% , it receives four stars (Above Average); the next 35% earns a fund three stars(Neutral or Average); those in the next 22.5% received two stars (Below Average); and the lowest 10% received one star (Low). For greater detail, see

For the period ended on October 1, 2020, the returns of the FDP Canadian Bond Portfolio (Series A) are as follows: 8.01% (1 year – 524 funds), 5.49% (3 years – 451 funds), 3.69% (5 years – 344 funds), 3.45% (10 years – 161 funds) and 7.51% (since inception – March 31, 1978).

For the period ended on October 1, 2020, the returns of the FDP Canadian Equity Portfolio (Series A) are as follows: 1.67% (1 year – 680 funds), 5.58% (3 years – 591 funds), 6.74% (5 years – 415 funds), 6.34% (10 years – 220 funds) and 7.46% (since inception – December 31, 1987).

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