Firm: Raintree Wealth Management
Position: Chief investment officer
Years in wealth management: 5
Years as a portfolio manager: 1
A Young Gun in the portfolio manager space, Greg Bainbridge is in his first year as a PM. A CFA charterholder, Bainbridge came into wealth management after working with the Edmonton Economic Development Corporation and in Telus Communications’ business solutions division. Today, he holds dual roles with Raintree Wealth Management as chief investment officer and chief compliance officer. Given the changing regulatory environment, it’s a massive responsibility, but not so big that he doesn’t find the time to converse with clients regularly.
“A lot of the time we spend with clients focuses on current markets risks, the North American political climate and how we are positioning portfolios,” he says. “New clients are often surprised to see how different our asset allocation profile is relative to their current holdings. We spend a lot of time on client education and setting the appropriate expectations with clients."
At the moment, Bainbridge is taking a conservative approach by limiting risk across his portfolios in response to the late market cycle.
“We are defensively positioned in our portfolios right now because of valuation levels, particularly in the US market,” he says. “Our portfolios weathered the volatility in early February well, as well as the more recent volatility. We didn’t experience nearly as deep a drawdown as the broader market. We plan to move more aggressively into equity markets once we see more attractive valuation levels.”
Contrary to many of the other portfolio managers featured here, Bainbridge is confident the domestic market will provide the kind of returns his clients seek.
“Our portfolios weathered the volatility in early February well ... We plan to move more aggressively into equity markets once we see more attractive valuation levels”
“We believe Canada is poised to outperform the US market over the next full market cycle,” he says. “We have also increased our exposure to international developed markets and emerging markets, which, in our view, offer more promising long-term return potential than the US market."
In fixed income, the prospect of rising interest rates mean shorter duration is the way to go, Bainbridge says.
“We’ve gradually been reducing the duration of our bond portfolios and now hold a duration of under five years,” he says. “In addition, given tight credit spreads, we’ve moved our fixed-income portfolios into higher credit segments.”
Emerging markets are another place where Bainbridge sees opportunity. It’s always a risk increasing exposure to these jurisdictions, but no so much as to ignore the potential rewards, he believes.
We are overweight in emerging markets on a relative basis right now,” he says. “Not only do we like EM for its diversification benefits, but it’s also the most cheaply priced market today. Macroeconomic and political risk in these markets is always a concern, which is why we limit our EM exposure to portfolio thresholds lower than our Canadian and US counterparts.”
Like many of his peers, Bainbridge believes alternative investments are also an important part of the asset mix.
“We use a number of alternatives to traditional equity and bond markets,” he says. “Our absolute return strategy is designed to be market-neutral, using various long/short and arbitrage strategies. In addition, we overlay a tactical return component to our portfolios that takes a view on currency, sectors, countries and asset classes to drive returns.”