CI Global Asset Management Panel Discussion – January 2026

Happy New Year!

This month, teams across CI Global Asset Management pooled their experience to deliver a panel discussion addressing a range of key global investment issues. We are pleased to be joined by:

• Lorne Gavsie, SVP & Head of Macroeconomics and Foreign Exchange Strategy
• Geof Marshall, SVP, Head of Fixed Income & Lead – Private Markets
• Peter Hofstra, SVP, Co‑Head of Equities (Research)
• Kevin McSweeney, SVP, Portfolio Manager & Lead – Canadian Equities
• Curtis Gillis, VP, Portfolio Manager & Research Lead – Equities
• Leonie Soltay, Portfolio Manager – Equities
• Alfred Lam (moderator), SVP, Co-Head of Multi-Assets

Geopolitics and Global Economics

Alfred Lam:
This is topical: On January 3, the United States attacked Venezuela and captured President Nicolás Maduro, placing him on trial for terrorism and drug trafficking. Many global powers, as well as a significant portion of the Venezuelan population, appear to view this as a rescue rather than an invasion. Leaving politics aside, Lorne, what are the key economic implications for Venezuela, the United States, Canada, China and the broader Latin American region?

Lorne Gavsie:
From a macro perspective, the events in Venezuela can be framed as a policy and energy story that will unfold over time. Venezuela’s recovery, both economically and in terms of energy output, hinges on a stable political transition, clear sanctions guidance and significant foreign investment, so progress is likely to be uneven and slow.

A durable lift in oil production may take years. Venezuelan barrels will very likely be redirected north to U.S. refineries. China will lose access to discounted crude from Venezuela and questions abound on whether their other 'low-cost' suppliers, Russia and Iran, may be targeted harder if they continue to sidestep western sanctions. 

Crucially, the actions in Venezuela lend credibility to the U.S.’s intention to implement their new national security strategy, with a focus on securing control of the Western Hemisphere. Their objectives, as outlined in the strategy note, could be pursued through military action if negotiations with allies fall short, raising uncertainty and risk premia across the region. The net effect is higher uncertainty for investment and growth across Latin America, alongside heightened concerns around sovereign security.

Alfred Lam:
The U.S. dollar weakened materially last year, yet the Canadian dollar lagged most major peers. How are you thinking about the loonie in 2026 and what are the main drivers behind your view?

Lorne Gavsie:
In 2026, we see a modestly weaker U.S. dollar as U.S. rates fall, the U.S. growth premium narrows and hedging costs remain high. For CAD, the setup is more constructive than in 2025. Growth should improve alongside a firmer U.S. backdrop, fiscal initiatives are rebuilding confidence and with the Bank of Canada now on the sidelines, interest rate differentials should be less of a headwind. The main risk is trade policy uncertainty and USMCA. A favourable resolution could unlock a catch-up phase for the loonie.

Energy Markets and Canada’s Position

Alfred Lam:
It is now widely expected that the United States will gain access to Venezuela’s significant oil reserves. Curtis, what does this development mean for global oil prices and for demand for Canadian oil over the next several years?

Curtis Gillis:
Short-term (1-2 years), we do not expect the removal of Maduro and increased access to Venezuelan oil reserves to have any meaningful impact on oil prices. Years of underinvestment requires meaningful capital to repair and remediate the oil infrastructure in the country, let alone the capital required to grow production. Oil companies will need to see stabilization of the political environment in Venezuela as well as fiscal terms that are competitive with other oil producing regions. It will therefore take some time to create an environment that will attract the necessary capital investment.

Longer term (3-5 years), assuming a change in Venezuela’s administration and fiscal terms that attract the necessary capital to upgrade the oil infrastructure assets and grow production, the incremental heavy oil volumes are expected to put pressure on (i.e., widen) light–heavy oil price differentials. This will create competition for Canadian heavy oil/oil sands barrels targeting the Gulf of America refineries (~20% of Canadian heavy oil/oil sands exports go to the U.S. Gulf Coast) and thus lower the prices received by Canadian producers selling to U.S. refineries.

The expected increase in competition from Venezuelan heavy oil barrels over the next 5 years increases the need and urgency for Canada to develop further egress that is not dependent on the U.S. end market.

Alfred Lam:
What competitive advantages does Canada have relative to Venezuela in energy production and exports?

Curtis Gillis:
As oil is a fungible commodity, the ability to differentiate is difficult. That said, Canada’s key competitive advantages over Venezuelan imports are primarily twofold:

1. Timing – It is going to take time for oil companies to feel comfortable enough with above-ground risks in Venezuela to commit capital. The fiscal terms also need to be attractive enough to attract this capital. Chronic underinvestment in Venezuela has resulted in a degradation of oil infrastructure and a loss of sector expertise. Canadian producers are therefore unlikely to experience any meaningful competition from Venezuelan barrels in the short-term (next 1-2+ years).
2. Technology – Canada continues to invest in research and development while Venezuela has not, resulting in a gap in competencies between the oil sectors in each country. This has resulted in improved oil recovery rates and efficiencies (i.e., better well economics) from newer technology (e.g., solvent-assisted steam-assisted gravity drainage – SA-SAGD) as well as a reduction in emissions intensity in Canada’s heavy oils relative to Venezuela. If the Pathways project (carbon capture, sequestration and storage) gets developed, Canada would then have the lowest global carbon footprint for heavy oil/oil sands.

Alfred Lam:
So, the Venezuela event is expected to have a long-term impact and in the near-term Canada needs to use its advantage to properly position itself for this new reality. I hope our prime minister is reading this. Leonie: Gold bullion prices were 65% higher in 2025. What drove this rally? Can you comment on both opportunities and risks from here?

Leonie Soltay:
The gold market was one of the largest beneficiaries of rising geopolitical tensions and economic uncertainty in 2025. However, elevated gold prices led to weaker jewelry demand and a moderation in net central bank purchases during the year. This softness was more than offset by strong investor and retail demand, as evidenced by rising ETF holdings. Looking ahead to 2026, the U.S. dollar is expected to remain weak and the Federal Reserve is anticipated to continue its rate‑cutting cycle, at least in the early part of the year—both of which are supportive of gold prices. Central banks are also expected to remain net purchasers in 2026 as they continue to accumulate gold to diversify foreign exchange reserves. Persistent uncertainties around economic policy and tariffs, rising global debt levels and ongoing dollar diversification trends remain key themes.

Virtually all of the macro drivers that propelled gold to highs of approximately $4,500/oz in 2025 are still in place and are expected to continue into 2026, supporting elevated gold prices this year. Risks to this outlook would be cooling of global political and economic tensions, which would reduce gold’s safe haven appeal. Other risks include a strengthening USD or if the Fed shifts towards a more restrictive policy outlook.  

Monetary Policy and Fixed Income

Alfred Lam:
Let’s turn to economic fundamentals. Geof, the U.S. Federal Reserve will soon have a new Chair and it has recently announced the end of quantitative tightening. What’s your outlook for growth and inflation for both Canada and the U.S.?

Geof Marshall:
In broad strokes, we see a shift in the market narrative from ‘Bad Trump/Bad Fed’ – meaning tariffs, DOGE, sticky inflation and a pause in the interest rate cutting cycle – in the first half of 2025 to ‘Good Trump/Good Fed’ that began in the second half of last year. ‘Good Trump/Good Fed’ can be described as fiscal policy focused on tax cuts and deregulation and a restart of dovish monetary policy that likely continues under a new Fed Chair. This should be a good environment for growth in the U.S. AI-related spending will trickle down to new manufacturing and services jobs as data centres and additional power generation are built. With labour market weakness and tariff impacts subsiding, inflation should continue to gradually fall through 2026. Economic growth in the U.S. is usually positive for Canada and the Bank of Canada was earlier and more aggressive in cutting interest rates than the Fed. Coupled with serious attention now being paid on addressing our lack of productivity and the need to find new export markets, we are also optimistic on Canadian economic growth in 2026.

Alfred Lam:
There has been significant discussion around rising leverage being used to fund artificial intelligence investments. Geof, what is your assessment? Do you expect investment‑grade credit spreads to widen in 2026?

Geof Marshall:
The corporate bond markets have been buoyed in recent years by robust demand but limited net supply. This will likely change in 2026 as the amount of capital required to fund AI-related spending on chips, data centres and power supply will likely be measured in the trillions of dollars over the next couple of years. Much of this funding will come from U.S. investment-grade bond issuance and bouts of indigestion and questions about ultimate AI returns on investment will likely push investment-grade bond spreads slightly higher in 2026. Not enough, though, to push returns below that of government bonds of comparable maturities. Since little of this new supply will be in Canadian dollars, Canadian investment-grade bond spreads will likely prove more resilient, at least until new issuances for nation-building projects materialize in the years beyond 2026.

Alfred Lam:
I am on the same page and expect bonds to do fine in 2026. However, we have been diversifying into private investments and commodities. Geof, you’ve become our in‑house expert at CI Global Asset Management for private investments—can you explain why it makes sense to incorporate private investments into a diversified portfolio?

Geof Marshall:
As portfolio managers, we are always searching for relative value and efficiency. Generally, private equity is cheaper than publicly listed stocks and will benefit from greater breadth, specifically meaning private equity does not have a ‘Mag 7’ issue driving the bulk of returns. Efficiency drives diversification. The addition of weakly correlated assets to portfolios can lower volatility. Private market assets are generally priced on a quarterly or monthly basis, providing more ‘signal’ than the ‘noise’ or overreaction sometimes evident in the public markets. Properly constructed, meaning diversified by asset class, strategy, manager and vintage, the addition of private markets to a typical ‘60/40’ client portfolio can provide the buffer – or lack of volatility – similar to the 40% fixed income weight and the returns, or better, of the 60% equity allocation. Put differently, over the long-term, the addition of private markets to portfolios is expected to lift returns and lower volatility.

Equities: Canada, the U.S., and Innovation

Alfred Lam:
The Canadian equity market outperformed the U.S. market in 2025. Kevin, do you expect this momentum to continue, particularly given uncertainty around the future of USMCA?

Kevin McSweeney:
While USMCA challenges are a wildcard (and I am optimistic that we get to a deal at some point this year), there is a lot of economic and market support that I can see for 2026 market performance.

I think that the momentum should continue, although I’d say that I feel slightly less positive about Canada outperforming the U.S. than I did last year, even as I remain constructive overall. There are a few different tailwinds for the Canadian market, despite uncertainty around the trade file. One thing is that volatility in geopolitics, rather than hurting Canadian markets, ended up helping it in 2025, with the TSX gold sector recording large gains and driving much of the outperformance. While it makes sense in retrospect  and we benefited from our gold exposures, it wasn’t something we would have expected. As well, the resilience of global markets in the face of volatility helped the large financial services companies in Canada, particularly in their capital markets and asset management businesses. These stocks have gone from being cheap at the beginning of 2025 to being fairly valued or maybe a little expensive in 2026.

Another positive factor is the possibility of large inflows to the equity market from people pulling money from savings products like GICs. GIC or related savings products are now at low levels of yield/return thanks to the Bank of Canada’s recent interest rate cuts. Outflows from investors who are only seeing 2.5% GIC rates, versus the 5% they would have seen a few years ago, played a key role in supporting and expanding TSX valuations last year and seem likely to continue through 2026. International investors also were net buyers of Canadian stocks at the end of 2025 after selling the market as trade fears hit in the first part of the year.

And although government spending needs to be restrained at some point, 2026 fiscal stimulus gives a more favourable investment backdrop through support for consumers and the removal of impediments to corporate investment across Canada for infrastructure and related investments.  

Only about half of TSX companies’ revenue comes from Canada, so even though I think that Canadian growth could be a little weak, particularly in the first half, we see a firming up of Canadian growth by the end of the year which should help domestically focused firms.

Alfred Lam:
Good to know. Can you share a few Canadian companies you currently favour and more broadly, what factors concern you most when investing in Canada?

Kevin McSweeney:
One can like stocks for a variety of reasons: great management teams, fantastic valuations, exposure to long-term positive economic trends. And within those buckets, there are quite a few interesting stories within the Canadian market.

One that comes together on great valuation and exposure to long-term trends would be Finning. Finning provides rental and servicing of heavy equipment in Western Canada and South America. With reduced permitting regulations in Canada and increased mining investment in South America, combined with a heavily discounted valuation relative to its peers, we think that Finning has some room to run, even after a 2025 when it recorded a return of almost 100%.

It seems odd to mention one of Canada’s largest companies as an underappreciated stock, but we still like Shopify, the e-commerce giant. They’ve shown that they have an ability to keep on winning in the e-commerce space, their “Shop Pay” app is very competitive with Apple and they keep partnering with an incredible array of small and large businesses (including ChatGPT).

And on a valuation basis, I think that Air Canada is really interesting. In the U.S., people are focused on the “K-shaped economy”, where the rich are driving consumption given their outsized share of income and wealth. This leaves companies that are exposed to the spending of affluent consumers in a good spot. We don’t have a lot of those in Canada, but it is clear that the rich, as well as older Canadians, are spending more on travel experiences. Air Canada is obviously well-positioned for this via its airline, but also through its Vacations and Aeroplan segments. It trades at a large discount to its U.S. peers, despite a much less competitive environment – we’re quite constructive and enjoy the fact that this is a very contrarian take.

The biggest concerns are i) interest rate policy switching toward a hiking cycle by the end of the year, ii) commodities – which are 33% of the TSX – falling due to economic weakness  and iii) the trade file being resolved unfavourably. Each of those could derail the positive momentum that Canada has in its markets and its investing “brand” around the world.

Alfred Lam:
There is widespread agreement that artificial intelligence represents the future, yet many also argue it may be a bubble. Peter, given your track record investing in innovation, do you believe AI is closer to the beginning of a long cycle or the end of a speculative bubble and what does that mean for investors?

Peter Hofstra:
We’d suggest things are bubbling but this is not one big bubble. The valuation on the big AI spenders, Microsoft Corp, Alphabet Inc, Meta Platforms Inc and Amazon.com Inc, is not in bubble territory, nor is the valuation on Nvidia Corp, which is the prime beneficiary of the spending.  There are areas to be mindful, including valuations in the private market, valuations with select public companies  and with secondary data centre builders, that tend to be debt heavy. We do believe the build-out and use cases have a long way to go and AI will become embedded in many products and services across sectors and geographies. Thus, while the opportunity is great and has a long way to go, we know the road is never smooth. 

Alfred Lam:
Given the fact that the road is not going to be smooth, it feels good we have you and your team to manage our assets actively. With the scale of investment flowing into AI, could productivity gains and profitability improvements become more meaningful as early as 2026?

Peter Hofstra:
The impact will definitely be felt in 2026. The early adopters will see productivity and profitability benefits. We’re already hearing of this in areas like construction and food services, as well as in computer programing. Our sense is that everyone will need to adopt and utilize AI or be left behind, thus the profitability benefits of the early adopters could have limited life. 

Alfred Lam:
Looking further ahead, what roles do you see humans playing in a world increasingly shaped by AI and robotics? Tesla CEO Elon Musk has suggested work could become optional within 20 years. That may not affect you and me, but it could profoundly impact our children and grandchildren.

Peter Hofstra:
Honestly, every technology has been seen as a threat to employment. Back in the ‘70s, engineers had a mandatory course on what to do with your time once robots and automation did all the work. This doesn’t mean we take the idea lightly. AI is expected to have a big impact and will shape everything from education to the work force. The question is, does AI displace human employment or add to human employment. We seem pretty good at finding new things to do. The world you and I are in today is very different from the world we grew up in. The world will look very different for our children and their children, but let’s hope they make good use of the tools they have. 

Alfred Lam:
Thanks for your thoughts, Peter. As you know, I invest a portion of my daughter’s RESP in your Global Alpha Innovators Fund to hedge her future “career” risk. I do hope robots don’t eat her lunch but feel more comfortable knowing she also owns the robots!

Market Outlook

Alfred Lam:
Wow. This is really wonderful. However, we have to conclude. My final question for each of you: Do you expect the markets you invest in to be higher from here and why? Please also outline the key risks to your assumptions.

Geof Marshall:
In fixed income, we expect the belly of the yield curve – or intermediate-term interest rates – to be rangebound, with government yield curves steepening as Fed dovishness faces additional debt issuance to finance deficit spending. Corporate bonds should do well in 2026 and returns should approximate starting yields. Corporate bond spreads may drift higher, pressuring returns somewhat, on significant supply and the beginning of a re-leveraging cycle (bondholders benefit from de-leveraging/de-risking, while shareholders tend to benefit from re-leveraging/investing for growth). The team believe we will see higher supply and greater re-leveraging in the U.S. market, so we expect Canadian investment-grade bonds to outperform the U.S. Overall, we expect a positive experience from fixed income in 2026, but with returns lower than 2025.

We expect the private markets to post returns competitive with the public markets in 2026.  Valuations, earnings growth and yields are comparable or better and sentiment – a contrarian indicator – is soft. Questions remain about the health of private credit, but we do not expect a systemic issue. Real estate continues to rebound from the interest-rate-induced sell-off in 2022, albeit more slowly than the public markets. Private equity is managing through excess. Older vintage PE funds have struggled for three to four years with monetizing existing investments. The IPO market has been mostly closed during this time and financials buyers have lacked capital. The lack of selling to crystallize gains has suppressed returns and for managers unable to generate distributions to investors, this has created a very tough fundraising environment. Many subscale or poorly performing private equity managers will not survive. If selling is difficult then it must be a good time to put new money to work in the market and we are bullish on private markets, especially private equity.

Peter Hofstra:
We do see the underlying trend, in the build-out and use cases for AI, continuing. AI is incredibly compute- and power-intensive, creating enormous spillover effects from semiconductor manufacturing to power installations, which should support continued fundamental growth. The valuations on the largest players are not exuberant, at this point, supporting stock market growth.  The misuse of AI could cause a regulatory reaction, which would slow the pace of the AI build-out, but the more likely risk is classic volatility as speculation of the scale and longevity on the build-out waxes and wanes. 

Kevin McSweeney:
I’m very confident that Canadian equity markets will be higher in a year. Statistically speaking, the TSX has gone up 18 of 25 years this century, so first of all, I’m playing the odds.

While U.S. trade relations are clearly a wildcard, there is likely a deal to be made that restores predictability, even if it is not as “free” as it has been historically. As well, we need to see inflation remain low to let low interest rates continue to work their way through the economy. These are the main risks.

However, the things to focus on are that Canada has a consumer base that has withstood a major interest rate hiking cycle, commodities that the world wants, savers that will be forced into stocks to achieve positive real returns, a corporate community that can increase investment and a more positive environment – if still imperfect – from government. Together, these factors give me confidence in a positive performance from the TSX, with Canadian markets holding a number of underappreciated strengths.

Alfred Lam:
In conclusion, there are compelling reasons to remain bullish entering 2026 despite ongoing geopolitical concerns. Inflation continues to ease, while earnings growth is being supported by both fiscal and monetary policy. Additionally, advances in artificial intelligence are expected to drive meaningful gains in productivity and operational efficiency that will become more apparent starting in 2026.

Our portfolios are positioned constructively, with an overweight allocation to equities and an underweight position in bonds. This reflects our view that equities are likely to outperform bonds, though we do not anticipate negative returns from fixed income. We maintain strong conviction in the artificial intelligence super-cycle and have carved out a dedicated portion of the portfolio to invest in the long‑term beneficiaries of this theme. Several of our strategies, such as long gold, delivered strong performance in 2025 and we are actively evaluating opportunities to trim positions and reallocate capital in anticipation of potential changes in market leadership in 2026.

Thank you to our panelists – Lorne, Geof, Peter, Kevin, Curtis and Leonie – for your valuable insights.

About the Author

Alfred Lam, MBA, CFA

Alfred Lam, Senior Vice President, Co-Head of Multi-Asset, joined CI GAM in 2004. He brings over 23 years of industry experience to his portfolio design, asset allocation, portfolio construction, and risk management responsibilities, which include chairing the multi-asset investment management committee and sizing investment bets to drive added value and manage risk. Alfred holds the CFA designation and an MBA from York University Schulich School of Business. He is a recognized leader in multi-asset investing in Canada. During his tenure, his team has won multiple investment awards, including the Morningstar Best Fund of Funds, and saw assets growing four-fold.