Emphasizing Process to Provide Peace of Mind
May 19, 2022
Investors have been on a wild ride this year. Geopolitical conflict, supply chain challenges, rapidly rising inflation – they’ve all contributed to the current volatility in spades. And while seasoned investors sometimes welcome volatility as part of the investment game, it can still be unsettling for even the experts, especially when we experience unprecedented changes.
As we write this Market Commentary in mid-May, our outlook is cautiously optimistic despite the wild ride investors have been treated to this year thus far. And that optimism is rooted in the quality and diversification of our portfolio, our commitment to alternatives, and our commitment to provide peace of mind to our investors. We are pleased to report that both of our Alternative pools posted positive returns in April and significantly outperformed public market benchmarks. But we believe our six ‘peace of mind’ principles are the foundation for long-term success.
“If there is one theme that I hear from our investors more often than any other, it is their desire to be able to sleep at night with the confidence that their investments are being professionally managed,” says David Udy, WealthCo’s Founder and Chief Executive Officer. “Peace of mind is extremely important to them. Dave Makarchuk, our new Chief Investment Officer, shares our commitment to our investors and I’m confident that he’ll further the evolution of our portfolio in a prudent and professional manner.”
Sophie Blais, WealthCo’s President and Chief Operating Officer, David and Dave share their insights on the six principles WealthCo follows to deliver peace of mind regardless of the economic environment.
1. We Take our Fiduciary Responsibility very Seriously
A fiduciary is an individual or institution that is entrusted with the management of assets on behalf of another person or entity. During volatile financial times, this fiduciary role becomes even more important as we leverage our expertise to help our clients navigate uncertain times and make sound financial decisions on their behalf.
“Each of our investors, as well as WealthCo’s accountant partners, have entrusted us to prudently investment their money on their behalf and help them achieve their investment objectives,” says Udy. “We are honored to have earned their trust and we are committed to make portfolio decisions that are in the collective best interest of every single one our investors. They are counting on us.”
2. Client Assets are Held Independently
100% of client investment assets are held in external trusts that are independent of WealthCo. That means that clients can rest easy knowing that their funds are not vulnerable to any firm financial risks at WealthCo.
“RBC Investor Services Trust acts as both the custodian and trustee for all investments that WealthCo makes on behalf of our clients,” Blais explains. “National Bank Investment Network holds the client units of the RBC accounts. Together they bring confidence for our investors that the WealthCo funds are properly valued and accounted for.”
3. Transparent Client Reporting
In an industry where trust is so important, transparent client reporting is a must-have. This reporting allows for clients to see exactly where their money is going and how it is being used.
“Look-through reporting is important to both our accountant partners as well as our end investors, even if they don’t review the details all that often,” Blais shares. “It’s hard to say we’re accountable if investors can’t see what they’re invested in.”
4. A Commitment to Responsible Investing
Broadly speaking, responsible investing considers environmental, social, and governance factors when making investment decisions, and can help investors achieve peace of mind knowing that their money is being invested prudently and responsibly.
“Each of the three pillars of responsible investing are important” Makarchuk says. “Environmental considerations sometimes get most of the headlines, but good governance and social policies are critical as well. We definitely believe that companies that are committed to ‘doing the right thing’ will outperform over time, and we’re committed to ensuring that an appropriate ESG framework is in place for any prospective manager that we partner with.”
5. A Focus on Downside Protection
“From the beginning, I’ve heard from our clients that they’re more concerned about the downside than the upside,” Udy explains. “Our portfolios have been constructed with that in mind. We’d rather be a little behind the market when returns are soaring and well ahead of the markets when markets are falling…over the long term we believe that’s the best way to meet our client’s investment objectives.”
“So far in 2022, we are seeing the relative performance that we expect,” Makarchuk says. “While public equities and fixed income are suffering significant losses, each of our Alternative Income, Alternative Growth, and Fixed Income pools are significantly outperforming their public market benchmark. Hopefully, this helps investors sleep a little easier at night when they see broad market returns as volatile as they are.”
6. We Won’t Make Speculative Investments
While speculative investments such as cryptocurrency have the potential for high returns, they also come with a high degree of risk. Risk that the WealthCo investment philosophy does not support.
“We will never put our client’s money in speculative investments without a sound thesis and plan for the return of capital,” Makarchuk shares. “Investments in things such as cryptocurrencies are non-starters for us. If individual investors have some play money that they can afford to lose and want to see what happens in the crypto market, that’s up to them. But the economic rationale just doesn’t make sense to us.”
Ready to experience the peace of mind that comes with prudent investment practices and a fully integrated approach to growing and protecting your wealth? Connect with your accountant today to discuss how you can best maximize the Integrated Advisory network to your full advantage during these volatile times.
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