A big investment theme for the next decade is the shift to digital living from physical. We are learning that we can complete many tasks more effectively through computing intermediaries. Remote meetings and online conferences eliminate travel and commercial space requirements, telehealth provides safe and quick access to medical professionals, and perhaps the largest category, e-commerce allows us to shop an unlimited selection of goods from our couch. Read
The concept of interest rate duration should be front and center in investors’ minds. Duration is an asset’s sensitivity to change in interest rate. For years, falling interest rates provided a tailwind to markets…real estate, bonds, equities, you name it. With the reopening of economies on the horizon, rates are beginning to increase, with the U.S. 10- year Government yield rising 60 bps year-to-date. This move likely explains the underperformance in many large-cap growth stocks as these companies derive most of their value from their long-dated cash flows five-plus years out. Whether this move in rates is a simple adjustment or the start of a longer move higher is yet to be determined. Read
Alliance Data Systems (ADS) is a provider of retailer loyalty solutions, most prominently through its white-label credit card program and the Air Miles rewards program in Canada. Let’s be honest – Alliance Data Systems has not been a stellar performer in the Global Equity Growth Fund. We originally purchased the shares in 2018, with our sights set on a turnaround through the streamlining of the business. However, its core business deteriorated more than we anticipated, and the pandemic-driven closure of physical retailers negatively impacted the company’s 2020 earnings. Entering 2021, we are encouraged by the improving physical retail environment as well as steps the company has taken to strengthen its strategic position. These have involved a renewed focus on growing with online retailers, hiring an outsider CEO and, most importantly, the acquisition of Buy Now, Pay Later (BNPL) company “Bread”. Read
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