Portfolio Managers' Notes


February 2023



Enclosed in this Portfolio Managers’ Notes, we present BMO Nesbitt Burns’ latest portfolio strategy report to give you an update on equity markets and our strategist’s perspective. In addition, we have included the fourth quarter earnings report on Thomson Reuters, a Model Portfolio holding which recently increased their dividend.

Under the Wealth Management section, we have included a lengthy report by the Canadian Federation of Independent Business (CFIB) that highlights the importance of planning for business owner clients. We also remind you of the dates and limits for RRSP, TFSA, and RESP contributions. The last date to make an RRSP contribution for 2022 tax year is Wednesday, March 1st, 2023. We encourage all of those that have not yet completed all their 2022 contributions to their registered plans to proceed as soon as funds are available.


Market Research
Market Insights
Equity and Fixed Income Strategy:
Analysts: Stéphane Rochon, CFA, Equity Strategist and Richard Belley, CFA, Fixed Income Strategist.
The Case for Increasing Canadian Equity Exposure

With our conviction that inflation has peaked and a clear indication that the Bank of Canada has paused interest rate increases (soon to be followed by the U.S. Federal Reserve), this may be an opportune time to put money to work in the S&P/TSX Composite Index, which has a high weighting in attractive sectors and a relatively low valuation. In particular, the China economic “reopening” is a big deal which is not fully priced in yet, in our opinion, with several important economic indicators marking a “V-Bottom” (e.g., Port Container and Subway Traffic, Air Travel, Purchasing Managers’ Manufacturing and Services Data).
Read More

Thomson Reuters: TRI-TSX
Attractive Fundamentals  Support Valuation

Bottom Line:

We believe Thomson Reuters remains a compelling equity with very strong fundamentals, attractive free cash flow conversion and limited downside risk. We expect MSD revenue growth supported by margin accretion and a step-up in FCF, supplemented by tuck-in acquisitions. The company has outlined initial plans to monetize LSEG shares. It has increased the dividend 10% for the last two years. We believe that TRI warrants a premium multiple given its attractive fundamentals, growth opportunities and significant return of capital to shareholders. Target to C$182 (US$135). We remain rated Outperform.
Read More (please contact us)

Wealth Management

Succession Tsunami: Preparing for a decade of small business transitions in Canada 

Preparing A recent report by the Canadian Federation of Independent Business ("CFIB") highlights the importance of planning for our entrepreneurial/business owner clients. The national study was undertaken by the CFIB to learn about the perspectives of small-and-medium sized businesses ("SMEs") on succession planning and found that over 75% of small business owners plan to exit their businesses within the next 10 years, causing >$2 trillion in assets set to change hands within the next ten years. The report notes that only a fraction (<10%) of business owners have a formal succession plan, which creates opportunities for planning discussions to help improve the transition of a business from one generation to another, and ensure the vitality of the small and medium sized business ("SME") sector, its employees, and the Canadian economy at large. To ensure SMEs can better plan, the CFIB report also offers specific recommendations for business owners, Governments, Financial Institutions and professionals (e.g., financial advisors).
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Reduce Your Taxes with a Prescribed Rate Loan 

In a low interest rate environment, a popular tax strategy involves the use of a prescribed rate loan to split income amongst family members. However, as a result of the recent increases in the prescribed interest rate, which increased to 4% effective January 1, 2023, the income-splitting benefits of this strategy have narrowed.
Read More


Contribution Reminder
For Your RRSP, TFSA and RESP Accounts

Maximizing the value of your registered plans by making annual contributions to your Registered Retirement Savings Plan (“RRSP”), Tax-Free Savings Account (“TFSA”), and Registered Education Savings Plan (“RESP”) is an important wealth planning strategy. By making your annual contribution(s) early in the year, you’ll benefit from the tax-sheltered growth all year long.


The last date to make an RRSP contribution for 2022 tax year is Wednesday, March 1st, 2023.


TFSA contribution amount for 2023 is $6,500 or cumulative of $88,000 for 2023 if you have never contributed to a TFSA account.

The RESP is an excellent way to save for post secondary education for your children. A contribution of $2,500 to the RESP leads to a combined 30% in government matching savings grants.


Tim, Catherine, and Edward