MD Precision PortfoliosTM
March 10, 2025 Summary
After a detailed review of global economic and financial market conditions, MD Financial Management (MD) has made the following changes to the tactical asset allocation of the MD Precision Portfolios™ suite.
- We remain overweight equities Risks remain however, namely geopolitical and policy concerns and market concentration risks.
- We decreased our allocation to Canadian equities but remain slightly overweight. The Canadian market's heavy reliance on trade, coupled with tariff uncertainties, poses a risk to recent economic gains.
- We remain overweight U.S. equities. Relative to its international counterparts, U.S. equities continue to be more attractive.
- We increased our allocation to international equities but remain underweight. While the prospects of looser fiscal policy in the Eurozone has provided a boost, the positive sentiment may be short lived as growth remains sluggish relative to the rest of the world.
- We remain neutrally positioned in emerging market equities.
- We remain underweight fixed income overall.
- We remain neutrally positioned in cash.
Portfolio changes
Bars that are above the 0% baseline indicate an overweight position versus the portfolios’ strategic asset allocation, while bars below the 0% baseline indicate an underweight position.
“Underweight” and “overweight” are relative terms, linked to the strategic asset allocation outlined in the simplified prospectus. An underweight position indicates a lower weighting and is generally an indication of the relative unattractiveness of an asset class. An overweight position indicates a higher weighting and is generally an indication of the relative attractiveness of an asset class.
MD Precision Conservative PortfolioTM (3+ years)
MD Precision Balanced Income PortfolioTM (4+ years)
MD Precision Moderate Balanced PortfolioTM (7.5+ years)
MD Precision Moderate Growth PortfolioTM (10+ years)
MD Precision Balanced Growth PortfolioTM (15+ years)
MD Precision Maximum Growth PortfolioTM (20+ years)
Note: The number of years (in parentheses) indicates the investment time horizon.
| Portfolio | Canadian equities | U.S. equities | International equities | Emerging markets equities | Short Canadian fixed income | Canadian universe fixed income | Cash |
|---|---|---|---|---|---|---|---|
| MD Precision Conservative Portfolio | Overweight 0.04% | Overweight 0.93% | Underweight 0.15% | Neutral | Underweight 0.82% | Neutral | Neutral |
| MD Precision Balanced Income Portfolio | Overweight 0.04% | Overweight 1.07% | Underweight 0.16% | Neutral | Underweight 0.95% | Neutral | Neutral |
| MD Precision Moderate Balanced Portfolio | Overweight 0.06% | Overweight 1.46% | Underweight 0.22% | Neutral | Neutral | Underweight 1.30% | Neutral |
| MD Precision Moderate Growth Portfolio | Overweight 0.07% | Overweight 1.69% | Underweight 0.26% | Neutral | Neutral | Underweight 1.50% | Neutral |
| MD Precision Balanced Growth Portfolio | Overweight 0.09% | Overweight 2.07% | Underweight 0.32% | Neutral | Neutral | Underweight 1.84% | Neutral |
| MD Precision Maximum Growth Portfolio | Overweight 0.10% | Overweight 2.39% | Underweight 0.37% | Neutral | Neutral | Underweight 2.12% | Neutral |
Why make tactical asset allocation decisions?
MD makes tactical asset allocation decisions to shift the positioning of your portfolio in response to trends in financial markets. These decisions are made as market conditions change. Through discussions with our research partners, we look for temporary, shortterm opportunities that may increase returns and/or reduce the risk of your portfolio. This is distinct from your portfolio’s strategic asset allocation, which maintains a longer-term view
Tactical versus Strategic asset allocation
MD Precision Portfolios allow investors to benefit from a combination of tactical and strategic asset allocation. With our tactical decisions, we look for temporary, shorter-term opportunities, based on an outlook of six to 18 months, which can potentially increase the return and/or reduce the risk of your portfolio.
Strategic asset allocation reflects the policy weights (asset mix) that have been set for your portfolio based on your investment needs and objectives
We overlay the tactical asset allocation decisions on the strategic asset allocations that support each of the portfolios. This means that we may temporarily deviate from the strategic allocations to take advantage of shortterm opportunities. Tactical decisions are made within a defined range and “risk budget” (the amount of risk allowed for each portfolio).
MD’s unique tactical asset allocation approach
Ongoing, comprehensive monitoring of global economic and financial market conditions drives our tactical asset allocation decisions. As conditions change, opportunities may present themselves. To identify these opportunities, MD uses in-depth economic research from industry-leading sources in combination with our proprietary investment management methodology.
MD’s process takes multiple variables into account, including the macroeconomic environment, financial market conditions, market risk indicators and fundamental trends.
MD’s tactical asset allocation process is designed to make the following decisions:
- Equities versus fixed income–Is the environment set to support equities or better suited for the stability of fixed income?
- Relative equity–Within equities, which geographical locations provide the most potential?
- Relative fixed income–Within fixed income, are short-term or longer-term bonds more attractive?
- Currencies––How will the foreign currencies of our foreign investments behave relative to the Canadian dollar? most potential?
Tactical asset allocation decisions are supported by rigorous analysis and are adapted to the unique needs of MD clients.
Invest with confidence
Put leading asset global managers and all-in-one convenience to work for you with MD Precision Portfolios. An MD Advisor can help you determine the ones best suited to your goals