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RBC's Stu Kedwell on His Investment Strategy and Top Holdings

Strategic Insights

— 2 min read

Stu Kedwell, the senior portfolio manager and global head of equities at RBC Global Asset Management, shares his insights on why he's a gold bull and likes Berkshire Hathaway. Despite having built a successful career in finance, Kedwell's interest in stocks was sparked by his grandmother's inheritance of 40 shares of 3M. He now co-runs the $8.2-billion RBC North American Value Fund, which has consistently outpaced the S&P/TSX Composite Total Return Index since 2005.

Key Takeaways:

  • Kedwell's investment strategy focuses on buying growth stocks at reasonable prices, with a scenario analysis approach to understand different outcomes for the companies in his portfolio.
  • He is finding more value in Canadian equities, which make up 60% of the fund, particularly in domestic sectors such as banks, which are well-capitalized to deal with challenges related to rising unemployment and falling condo prices.
  • Kedwell is bullish on Canada's energy sector, citing the strong balance sheets and free cash flow generation of energy firms, and expects oil prices to recover in 18-24 months.
  • He owns Canadian Natural Resources and Imperial Oil, as well as pipelines such as TC Energy and Enbridge, which offer attractive dividend income.
  • Kedwell is a gold bull, preferring to own an ETF in the gold sector to reduce the risk of individual stocks, and cites concerns about the growing U.S. fiscal deficit and the dollar's plateauing.
  • Berkshire Hathaway is a top holding, and Kedwell believes that the company's management will handle Warren Buffett's retirement successfully.
  • The fund owns Meta, Alphabet, Microsoft, and Apple, citing their strong business models and growth potential, but notes that Apple is lagging in the AI race.

Statistics:

  • The RBC North American Value Fund has outpaced the S&P/TSX Composite Total Return Index since 2005.
  • Canadian equities make up 60% of the fund.
  • The fund's top bank holdings are Royal Bank and TD Bank, which were acquired at reasonable prices during a period of weakness.
  • The fund owns Canadian Natural Resources and Imperial Oil, which have long-life oil sands assets.
  • Oil prices are expected to recover in 18-24 months, at which point these stocks will be attractive investments.

Sources:

  • Globe and Mail: "We asked the portfolio manager and global head of equities why he’s a gold bull and likes Berkshire Hathaway"
  • RBC Global Asset Management: Kedwell is senior portfolio manager and global head of equities.
  • Globe and Mail: "Follow this link to view this story on globeandmail.com"

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