Firm: Milestone Asset Management/ Canaccord Genuity Wealth Management
Position: Portfolio manager
Years in wealth management: 21
Years as a portfolio manager: 11
Certifications: CIM, CFP
Like many of the portfolio managers featured here, Shawn Boos doesn't see increased votality in the markets as a bad thing. Rather, like many discretionary managers, he sees opportunities.
“The February correction in the markets didn’t change our strategy,” he says. “We used that as an opportunity to rebalance our portfolios up to full weight from slightly underweight equities. We are still positive on the intermediate and longer term, as our proprietary Milestone Recession Risk Composite is not flashing a warning of an upcoming recession, and the fundamental drivers of the current secular bull market remain in place.”
Working alongside partner Steve Nielsen, Boos believes the market will present more reasonable valuations going into the next round of earnings, but he’s reluctant to put too much weight into domestic stocks.
“The Canadian market overall continues to underperform, and we have a neutral to slight underweight stance currently,” he says. “Our asset allocation strategy has always dictated holding a significant portion of risk assets in US and international equities, and we are full to slightly overweight on those allocations.”
In gaining that exposure, Boos favours ETFs whenever they are appropriate. He believes there’s good reason for the investment vehicle’s growing popularity in Canada in recent years.
“The rise in popularity of ETFs has been a positive for the Canadian investing landscape and positive for us as well,” he says. “We have incorporated ETFs in our portfolios for over 10 years, and as the popularity has increased, it has led to more investing options, both passive and active, more visibility in the public eye, and lower fees."
“Over the past few years, we have slowly moved towards managed ETFs and funds for a significant portion of our fixed income. Continuing to hold low-yielding government and corporate bonds to maturity is not a strategy that has worked in this rising-rate environment”
Active ETFs are becoming more commonplace in Canada, too, and that is reflected in Boos’ portfolios, particularly in the fixed income segment. When it comes to the bond markets, he prefers to delegate to experts in that field.
“Over the past few years, we have slowly moved towards managed ETFs and funds for a significant portion of our fixed income,” he says. “Continuing to hold low-yielding government and corporate bonds to maturity is not a strategy that has worked in this rising-rate environment, so we prefer to allow a third-party manager with a vast team that specializes only in credit to manage a portion of our fixed income.”
Essential to this process is making clients fully aware of the service they’re receiving and what it costs. Only then can they evaluate what the true worth of discretionary management really is.
“We have always been advocates for increased fee transparency and improved portfolio reporting to clients,” Boos says. “The industry has come a long way in both respects over the past decade, but we continue to be advocates for improvements in the future.”
Portfolio management entails providing the investment expertise necessary to safeguard and grow a client’s assets. That might mean introducing a number of complex financial instruments, or, in Boos’ case, it might mean sticking with the products that have worked so well in the past.
“There has been a lot of talk about the 60-40 model being outdated; however, we still consider fixed income to be an essential component of a properly balanced portfolio,” he says. “Having said that, we are active in terms of how much we allocate to fixed income, ranging from 25% to 40%, and within that allocation, we have adjusted the types of investments we hold. Additionally, we have followed aspects of the Yale Endowment’s asset allocation model for over 10 years, which includes alternative asset classes such as real assets and absolute returns to add diversification and improve the risk metrics of a portfolio.”