Finding Global Opportunities in Your Own Backyard

Global equity markets continue to exhibit positive momentum, building off robust 2023 performance. The resilience and strength exhibited by U.S. equities is now dispersing to other major equity markets around the world, with many indices at or near all-time highs. Global economic indicators remain constructive and are supported by indications we may be in the mid-cycle stage of a conventional economic cycle - which bodes well for equities.

Investing in global markets at this juncture also provides access to unique, idiosyncratic ideas – such as the Japanese revival and the re-industrialization of the Western World. Japan's revival is being driven by corporate policy reforms and regulatory focus aimed at unlocking shareholder value for public equities. Meanwhile, a wave of spending on big picture secular trends such as decarbonization, supply chain reshoring, advanced computing and data centre buildout, infrastructure spending, and ageing demographics is driving real dollars into capital expenditures. This influx of investment in Western modernization bodes well for equities geared to these themes, particularly those in the U.S., Europe, and Japan.

You don’t have to travel the world to find a global investment opportunity. The TD Active Global Enhanced ETF (TGED), which has recently celebrated its five-year anniversary, does it for you by focusing  on investing in high quality global companies with consistent and sustainable cash flow compounding. In addition, the solution is designed to help resolve the specific challenge of balancing growth and income in the search for total yield. The strategy behind addressing this challenge aims to enhance income streams through a differentiated option overlay strategy. Unlike many competitor products, TGED use an active approach in both selecting stocks and writing options.

TGED was designed to be an all-weather solution that can adapt to changing market conditions, enhance returns, while also providing downside protection through all the facets of the market cycle. In fact, when reviewing periods of rising markets, TGED experienced compound returns better than the index and peer group¹. According to Morningstar®, over a 3-year rolling basis, TGED’s upside capture ratio is 122 compared to the global category’s 94, meaning TGED outperformed its benchmark in rising markets, whereas our peer groups only captured a handful of the market’s gains.

Conversely, in challenging environments our peers captured even greater downside than the market, while TGED provided investors defensive shelter through better drawdown management. TGED has delivered higher returns for a comparatively lower risk profile to both its benchmark and its peer group, making it a one-stop solution for clients to compound returns while managing risk through changing market cycles. 

Source: Morningstar

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