The vision of a stronger-than-expected economy with delayed rate cuts is shaping up on investor radar screens, but the ever-shifting outlook is keeping the portfolio management team at the $6.2 billion TD Canadian Equity Fund F (also available in Series D) on its toes.
While the stock market rebound in Canadian and U.S. markets at the end of 2023 and early 2024 was based on expectations of an imminent fall in interest rates, the end of rate hikes now appears to be postponed by six to nine months and markets are digesting the repercussions, says Michael O’Brien, managing director and portfolio manager at Toronto-based TD Asset Management Inc. and lead manager of TD Canadian Equity since February 2013.
“Investors were premature in terms of how fast they would get gratification from the Fed,” he says. “But it’s fair to conclude rates will be lower at the end of the year than today.”
