Quebec’s largest institutional investor has made several significant changes to its stock portfolio for the start of the new year, particularly in the tech and financial sectors.
Posted at 5:00 a.m.
After having been increased by 25% in the home stretch of 2021, the equity position in Apple is now one of the three largest held by the Caisse de dépôt et placement du Québec, can we see in a document filed this week with of the Securities & Exchange Commission.
For the second quarter in a row, the Caisse added a total of 1.8 million shares of the iPhone maker during the months of October, November and December.
The Caisse de depot, whose net assets amount to approximately 390 billion, did not wish to comment directly on the rebalancing of its stock market investments.
“We don’t discuss our investments piecemeal as we go along,” said spokeswoman Kate Monfette. However, it should be possible to obtain details on the Caisse’s strategies at the end of the month when the organization presents its annual results.
The stake in Apple exploded in 2021. At the start of the year last year, the Quebec institutional manager held 1.7 million shares of Apple. The Fund had 9 million to undertake 2022. This position is valued at approximately 1.6 billion US.
Apple’s stock rose 34% last year on the stock market, outperforming the 27% rise in the S&P 500 and the 21% rise in the NASDAQ. Apple’s market capitalization is close to the 3000 billion mark.
Apple is considered by some experts to be a “quality” tech title and less “cyclical” than many others.
Apple’s stock has been on a year-to-date decline, but the stock has rebounded since the release of early-year earnings at the end of January.
Adjustments in the financial sector
The relative importance of the major Canadian banks in the portfolio is also down sharply.
The Caisse reduced its investment in Royal Bank by 60% just before the end of the year, while its investment in Scotiabank has just been cut by about 65%. The same reasoning was applied with BMO (-62%) and TD (-42%).
In total, the Caisse sold more than 15 million shares of these four Canadian financial institutions during the months of October, November and December. This decision comes after the publication of good financial results in 2021 by the banks and while the Bank of Canada is preparing to raise its key rate.
When interest rates rise, banking institutions usually reap more revenue. Net interest margins have been squeezed by the low rates that have prevailed for several years.
The major Canadian banks had an exceptional stock market year in 2021. Royal Bank’s stock, for example, appreciated by nearly 30% last year and this bank has once again become the company with the largest market capitalization. stock exchange in the country with a value of approximately 207 billion dollars.
“Bank stocks had crashed at the start of the pandemic,” comments an assistant portfolio manager who cannot be named because he is not authorized to speak publicly by his employer.
“These stocks are now favored, while tech and growth stocks have fallen. Perhaps some will seize the opportunities in the so-called growth component now that equity stocks have risen sharply. »
The Caisse’s exposure to the banking sector had already been significantly reduced in the third quarter (July, August and September). Equity holdings in Royal, BMO and Scotia were down about 35%, while holdings in TD were down 60%.
The Caisse held 2.9 million shares of Royal to start 2022, a block of shares worth approximately 430 million at the current price. She held 14.6 million shares of Royal last spring.
Another major change noted in the composition of the Caisse’s stock portfolio concerns Manulife Financial. Investment in this Canadian insurer was cut by 70% at the end of the year with the sale of 10.1 million shares during the fourth quarter of 2021.
The Caisse had sold 4.8 million shares of Manulife during the previous quarter. Manulife’s number of shares therefore fell from 19.4 million to 4.5 million in six months.
Manulife shares hit a 52-week high on the Toronto Stock Exchange last week.
Significant transactions
Major Quebec institutional investors have multiplied transactions in the home stretch of 2021 in order to position themselves for the start of 2022. Here are some significant gestures.
deposit box
Head of Liquid Markets: Vincent Delisle
Headquarters: Montreal
Highlight: improved position in Apple
Other significant moves in the fourth quarter of 2021
Purchase of 2 million BCE shares
Sale of 2 million shares of Rogers
Purchase of 2 million shares of Pfizer
For the second quarter in a row, the largest institutional investor in Quebec increased its investment in BCE. After adding 6.7 million shares to the portfolio in the third quarter, the Caisse bought an additional 2 million at the end of the year. The purchase of 3.6 million shares of AT&T is also recorded. Investment in Gildan was cut by 15% (-1.6 million shares) in the fourth quarter, as investment in CP exploded by 1220% following the purchase of 1.2 million shares of the Calgary rail carrier.
PSP Investments
Chief Investment Officer: Eduard van Gelderen
Headquarters: Ottawa (main office in Montreal)
Highlight: Declining stake in TD
Other significant moves in the fourth quarter of 2021
Purchase of 1.6 million shares of CAE
Purchase of almost 1 million shares of Apple
Sale of 1.8 million shares of Enbridge
The Public Sector Pension Investment Board (PSP) – one of the largest fund managers for pension funds in the country – sold 2.6 million shares of TD Bank at the end of year, the equivalent of a 65% reduction in his investment in this financial institution. Investment in the Twitter social network was increased by 540% during the quarter with the addition of 723,000 shares. The investment in Fortis is for its part inflated by more than 300% with the purchase of 1.8 million shares.
Fiera Capital
Chief Investment Officer, Public Markets: Anik Lanthier
Headquarters: Montreal
Highlight: Reduced stake in TD
Other significant moves in the fourth quarter of 2021
Purchase of 3.6 million shares of Tricon Residential
Purchase of 1.4 million shares of PubMatic
Purchase of 1.1 million shares of Sangoma Technologies
Investment in TD Bank was reduced by 7% during the months of October, November and December with the sale of 565,000 shares. Fiera increased its investment in Enerplus by almost 20% following the purchase of more than 876,000 shares. That in Telus is increased by 3% with the addition of 415,000 shares in the portfolio. The stake in Brookfield Asset Management is lowered by 11% with the sale of a block of 830,000 shares.
Jarislowsky Fraser
Head of Research and Portfolio Manager, Canadian Equities: Charles Nadim
Headquarters: Montreal
Highlight: reduction of the stake in Manulife
Other significant moves in the fourth quarter of 2021
Sale of 573,000 shares of CAE
Sale of 540,000 shares of Gildan
Sale of 615,000 shares of Thomson Reuters
Scotiabank’s holding in the portfolio continues to decline. After selling 1.6 million shares of the financial institution in the previous quarter, Jarislowsky lowered his remaining stake in this bank by 3% (582,000 shares) in the last three months of 2021. The investment in Manulife is also lowered by 3% with the sale of 1.3 million shares. A stake in Wayfair is launched with the purchase of 127,000 shares.
Letko Brosseau
Investment Managers: Peter Letko and Daniel Brosseau
Headquarters: Montreal
Highlight: significant reduction in position in Cenovus
Other significant moves in the fourth quarter of 2021
Sale of 3 million shares of Canadian Natural Resource
Sale of 2.5 million shares of Ovintiv
Sale of 1.7 million Suncor shares
The weight of Cenovus continues to decline in the portfolio. After selling 3.4 million shares of Cenovus in the second quarter and 3.2 million shares in the third quarter, Letko Brosseau sold 11.3 million shares of the Calgary energy producer at the end of the year. ‘year. Enerplus is ejected from the portfolio with the sale of the 3.1 million shares held in the portfolio. The participation in Intel is also eradicated.