Wes Ashton, co-founder and director of growth strategy at Harbourfront Wealth Management Inc. in Vancouver.The Globe and Mail
North American markets have been on a tear in recent months, but money manager Wes Ashton is still playing it relatively safe for if, and when, there’s a pullback.
“A lot of investors have difficulty stomaching volatility, so our goal is to provide strong risk-adjusted returns,” says Mr. Ashton, co-founder and director of growth strategy at Harbourfront Wealth Management Inc. in Vancouver, who oversees about $585-million in assets.
Mr. Ashton’s balanced portfolio is built using about 60 to 70 per cent equities, depending on a client’s risk tolerance, with the remainder in fixed income and alternative assets that include private real estate and private debt.
“We plan for the dips in the market rather than reacting. It’s been a successful strategy over the years,” he says. “Our clients don’t see the same drawdown [as the markets] and they sleep a little better at night.”
His balanced portfolio has returned 13.1 per cent so far this year, and gained 16 per cent over the past 12 months. The five-year annualized return is 7 per cent. The performance is net of fees as of Nov. 30.
The Globe spoke with Mr. Ashton recently about what he’s been buying and selling:
Name three stocks you own today and why.
iShares Nasdaq 100 Index ETF XQQ-T, the Canadian-hedged version of an exchange-traded fund that tracks the Nasdaq 100, is an ETF we’ve owned since mid-2020 and have been adding to annually. Our average price over this timeframe is $35 to $40 a unit. This ETF allows us to diversify among a wider range of growth stocks beyond the Magnificent Seven. We expect to see a lot of growth in innovation and artificial intelligence in the coming years, which should help drive growth in this ETF. While it’s a diversified investment, there are risks with market volatility and regulatory changes.
Enbridge Inc. ENB-T, the Calgary-based energy and pipeline company, is a stock we’ve owned for about a decade and have been adding to at various times over the years. Our average cost is in the neighbourhood of $33 a share. We like Enbridge for its strong cash flow and steady and growing dividend. [The company announced its 30th consecutive annual increase on Dec. 3]. Enbridge has a 6-per-cent yield, which is higher and more tax-efficient than a guaranteed investment certificate or cash-equivalent account today. Risks for the company would be a slowdown in energy or a general market downturn.
Bank of Nova Scotia BNS-T is a stock we’ve owned since the second quarter of 2020 and we added more earlier this year. Our average price since 2020 is $56 a share. Scotiabank is one year into its new strategic plan to reallocate more money to its North American businesses, where it believes it has bigger opportunities for growth than in its Latin American operations. In August, it agreed to acquire a 14.9-per-cent ownership stake in Cleveland-based KeyCorp KEY-N. The stock has been under pressure this week since its fourth-quarter earnings missed analysts’ expectations, which could present a good buying opportunity. The bank also has one of the highest-yielding dividends among the big banks at 5.3 per cent.
Name a stock you’ve sold recently.
We sold iShares Core Growth ETF Portfolio XGRO-T in early September after owning it for about nine months. We did well on this ETF, generating a profit of 29 per cent, but decided to put the money into a more actively managed investment. We used the proceeds to buy a North American equity pool that’s exclusive to Harbourfront clients. We’re pleased with our decision to rotate the allocation as the pooled investment has gained 12 per cent over the past three months.
This interview has been edited and condensed.
Editor’s note: A previous version of this article stated that Scotiabank took a 14.9 per cent ownership stake in KeyCorp in August. The investment in KeyCorp is happening over two stages.