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Globe and Mail
5 days ago
- Business
- Globe and Mail
European optimism grows
Only in Denmark could a country create a world-class restaurant scene, rack up countless Michelin stars, and monetize culinary tourism to near perfection – and then give the planet an appetite suppressant like Ozempic. But Scandinavia, that wind-carved crown perched atop continental Europe, has always brimmed with irony. Sweden is known as a socialist's paradise, yet overflows with billionaires. Norway, awash in some of the world's largest proven oil reserves, sold 97% electric vehicles in June. And Finland – a land of silence and saunas – now shares the longest NATO border with Russia. Whatever the case, Forstrong's CEO is back in the Danish capital of Copenhagen. Yes, the dining scene and the city's almost irritatingly perfect blend of order and bohemia – a place with no bad angles – keep us coming back to the Nordic region. And evidently, we're not alone: The city is packed and tourism is booming across the continent. But beyond the vibe, something else is stirring: European stock markets are ripping. The numbers have surprised nearly everyone. During the first half of the year, European stocks outpaced their American peers by the widest margin on record (in U.S. dollar terms) – a dramatic reversal after more than a decade in the doldrums. And it's not just equities. The euro surged 13% against the dollar over the same period. Notably, European bank stocks – those crucial barometers of liquidity and risk appetite – are leading the way. The region's Stoxx 600 Financials Index posted its strongest first half since 1997, fueled by turnaround plans and a flurry of M&A activity. Germany's Commerzbank is soaring, lifted by strong earnings and takeover interest. Spanish and Italian lenders are also rallying on renewed dealmaking. And despite the surge in prices, bank valuations still trade well below long-term norms. Berlin goes big What's driving all this? The region has seen false dawns before, and the political instability and regulatory thickets that long deterred investors haven't disappeared. Broad equity valuations in Europe remain depressed relative to the U.S. But something more profound is now underway: an unintended consequence of Trump's economic nationalism and growing military isolationism has been to galvanize Europe into fiscal action on a scale not seen since German reunification in 1991. In a defining moment for Germany – and by extension, the EU – policymakers have agreed to break from constitutional budget constraints, clearing the way for a colossal €500 billion infrastructure and defense spending plan. The measures amount to 11.4% of Germany's GDP – enough to stave off recession risks and begin rebalancing the economy away from its heavy reliance on exports. Europe's largest economy is, at long last, committing to borrow and spend massively on defense and infrastructure. And the mood shift is real: Even with plenty of skepticism still in the air, a quiet optimism is starting to take root – palpable everywhere we went. The significance of this shift can't be overstated. The Eurozone's stagnation throughout the 2010s was shaped by two powerful forces: (1) a massive deleveraging cycle in the South following the credit-fueled boom of the 2000s, and (2) self-imposed austerity in the North, which brought on the most contractionary fiscal stance since the Great Depression. Both trends have now run their course – setting the stage for a reflationary boom in the second half of the 2020s. Europe's competitiveness problem But fiscal reform is just the visible tip of a much larger iceberg. The EU's policy consensus is now shifting from a near-obsession with austerity and cost control to a broader focus on innovation and domestic demand resilience. The old orthodoxy manifested in negative interest rates, a chronically weak euro, and fragmented capital markets. It's hardly surprising that while the EU accounts for roughly 17% of global GDP, it hosts only five of the 50 largest companies in the S&P Global 1200. Innovation has been stifled for years. Of course, the elephant in the room is Trump's trade war. Everywhere we went, Europeans expressed bafflement at the fickle, capricious nature of Trump's tariffs (join the club). But the direct economic impact on Europe will be far smaller than in the U.S. The OECD has estimated that the negative GDP impact on the U.S. of 10% U.S. tariffs will be four times greater than the effect on the EU. The reason is simple: While the U.S. is less reliant on trade than Europe, Trump's tariffs would disrupt nearly all U.S. trade – whereas they apply to only roughly 20% of EU exports that go to America. EU policymakers are now strolling through an orchard of low-hanging fruit. Unlike in the U.S., the university sector remains fragmented – along with public support for research and innovation. A lack of capital scale and risk appetite has left EU funding sources far less robust than those in America. A Berlin-based startup founder put it bluntly: 'We love Europe, but if we want to grow fast, we raise funds from U.S. venture capital and scale up in the American market.' Meanwhile, the IMF recently estimated that, despite the creation of a single market, the EU still suffers from major non-tariff barriers – ranging from inconsistent regulations to licensing requirements and other non-harmonized standards. The economic impact? These frictions amount to the equivalent of a 44% tariff on goods and a staggering 110% tariff on services. Former ECB head Mario Draghi, in a scathing report last year, argued that fixing the EU's lagging competitiveness (driven by 'fragmentation, over-regulation, insufficient spending and undue conservatism') would require €750-€800 billion in additional annual investment, equivalent to 4.4%-4.7% of EU GDP. That would push the region's investment-to-GDP ratio to levels not seen since the 1970s. Notably, no one seems to disagree with Draghi. To be sure, Europe still has a long road to competitiveness. But even marginal steps can have a big impact. In the meantime, the economic cycle is already turning and showing up in the data. Credit growth is picking up. Manufacturing is stabilizing. The property sector in the North is showing early signs of life. All of this will help unlock future consumption at a time when real wage growth rose 2.9% year-over-year in Q1 2025, and Eurozone households are still saving 15.2% of disposable income – well above the pre-pandemic average of 12.8%. The bull case is that this cyclical pickup, combined with structural tailwinds, helps shore up growth in the second half of 2025 – before igniting a more powerful turnaround in 2026. Strong markets are already sniffing that out. Investment implications We wrapped up the trip in Athens before venturing into the Aegean Sea to unwind in the Greek islands (pro tip: if you're prone to seasickness, skip the smaller island-hopping boats – they're not as glamorous as they sound.) Fittingly, we were last here 25 years ago (as a young analyst working for Germany's largest bank) – the start of the last major stretch of European equity outperformance over America (2000-09), a period that coincided with the painful unwinding of the U.S. tech bubble. U.S. tech is unlikely to be headed for the same fate this time around. The mega-cap names driving U.S. returns today are posting strong earnings and sitting on piles of cash. But these companies are at that tricky stage of having to live up to the AI hype and deliver a high return on the massive amounts of capital they have been deploying. By contrast, European stocks trade at a 35% discount to their U.S. peers – yet both are expected to deliver around 10% profit growth in 2026. The risk versus reward setup is compelling. The increasingly footloose nature of global capital means that investment themes can now shift quickly. This is already happening. After years of neglect, European equity funds have attracted billions in new inflows since the start of 2025 – a sharp reversal from the outflows of last year. Forstrong's strategies are aligned with this shift, holding active overweights in both European equities and bank stocks. Investors shouldn't ignore this unfolding European Super Trend. As one Swedish executive told us: 'The cycle has finally turned. It's time to catch the wave.' Tyler Mordy, CFA, is CEO and CIO of Forstrong Global Asset Management Inc., engaged in top-down strategy, investment policy, and securities selection. This article first appeared in Forstrong's Insights page. Used with permission. You can reach Tyler by phone at Forstrong Global, toll-free 1-888-419-6715, or by email at tmordy@ Follow Tyler on X at @TylerMordy and @ForstrongGlobal. Disclaimers Content © 2025 by Forstrong Global. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited. Used with permission. The foregoing is for general information purposes only and is the opinion of the writer. The author and clients of Forstrong Global Asset Management may have positions in securities mentioned. Performance statistics are calculated from documented actual investment strategies as set by Forstrong's Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of composite results for separately managed accounts. Actual performance of individual separate accounts may vary with average gross 'composite' performance statistics presented here due to client-specific portfolio differences with respect to size, inflow/outflow history, and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance numbers are net of total ETF expense ratios and custody fees, but before withholding taxes, transaction costs and other investment management and advisor fees. Commissions and management fees may be associated with exchange-traded funds. Please read the prospectus before investing. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.
Yahoo
21-03-2025
- Business
- Yahoo
Forstrong Global Asset Management Announces the Final Proceeds Relating to The Termination of an ETF
Toronto, Ontario--(Newsfile Corp. - March 21, 2025) - Forstrong Global Asset Management Inc. ("Forstrong") announces today the final proceeds relating to the termination of the Forstrong Global Ex-North America Equity ETF (TSX: FINE) (the "ETF") previously announced on January 16th, 2025. The units of the ETF were delisted from the Toronto Stock Exchange on March 18th, 2025. The proceeds from the liquidation of the assets, less all liabilities and expenses incurred in connection with this termination (the "Termination Proceeds") are as follows:Breakdown of Final NAV per UnitTicker Symbol Final NAV per Unit Income Capital Gain Capital FINE $23.3578 $23.3578 Each unitholder will receive the Termination Proceeds on a pro rata basis as per the table above. No further action is required on the part of unitholders. The Termination Proceeds will be paid on or around March 21st,2025, to CDS Clearing and Depository Services Inc. Investors will then receive the amount to which they are entitled according to their brokerage firm's processing delay. About Forstrong Global Asset Management Inc. For over two decades, Forstrong Global has been providing its clients with exposure to a range of globally oriented investments. Our investment professionals use an unbiased investment approach, focusing on opportunities beyond traditional North American portfolios to deliver differentiated returns and risk mitigation. Forstrong's product offerings include separately managed accounts, pooled funds, and three ETFs listed on the Toronto Stock Exchange, with approximately $1 billion of assets under management. For further information please visit or contact us at funds@ or 1-888-419-6715. Media Contact: Meredith Dekker, mdekker@ 416-460-2986. Management fees, brokerage fees and expenses all may be associated with investing in ETFs. Please read the prospectus, which contains detailed investment information, before investing. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. ETFs units are not guaranteed, their values change frequently, and past performance may not be repeated. ETF units are bought and sold at market price on the TSX or another exchange or marketplace and may only be bought and sold through licensed dealers. Brokerage commissions will reduce returns. There can be no assurance that ETF units will trade at prices that reflect their net asset value per unit. If ETF units are purchased or sold on the TSX or another exchange or marketplace, investors may pay more than the current net asset value when buying units of an ETF and may receive less than the current net asset value when selling them. There can be no assurance that an active public market for ETF units will develop or be sustained. There is no guarantee that the ETFs will achieve their stated objectives and there are risks involved in investing in the ETFs. Before investing you should read the prospectus or relevant ETF Facts and carefully consider, among other things, each ETF's investment objective, risks, charges, and expenses. A copy of the prospectus and ETF Facts of each ETF is available at or Certain statements may constitute a forward-looking statement within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "anticipate", "believe", "intend" or other similar expressions concerning matters that are not historical facts. The forward-looking statements are not historical facts but reflect our current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including but not limited to, that a receipt for a preliminary or final simplified prospectus may not be obtained from the applicable securities regulatory authorities, that Forstrong Global Balanced Fund may not be able to meet the conditional approval and listing requirements of the TSX, general economic, political, and market factors in Canada and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, and catastrophic events. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and we do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law. This press release is for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. This press release is not for dissemination in the United States or for distribution to U.S. news wire services. ©2025 Forstrong Global Asset Management Inc. All rights reserved. Forstrong Global® and the Forstrong Global® logo are trademarks or registered trademarks of Forstrong Global Asset Management Inc. in Canada. To view the source version of this press release, please visit Sign in to access your portfolio
Globe and Mail
20-03-2025
- Business
- Globe and Mail
Bull markets have begun…outside the U.S.
Can you feel it? The signs are everywhere. In this country, the list is long: selling second homes in Scottsdale; swapping out Kentucky bourbon for Canadian rye; or, the ultimate sacrifice for some, cancelling a trip to the Coachella music festival in April. The theme, of course, is hard to miss: as America turns inward, a wave of patriotic pride is sweeping the rest of the world. But forget brawling hockey players, banter about a 51st state or renaming bodies of water – the real vibe shift, as discussed in Forstrong's latest podcast with our ever-sonorous host Robert Duncan, is unfolding in financial markets. Trump's second term was widely expected to supercharge U.S. equities and the dollar while pummelling the currencies and stocks of its trading partners. Yet, just seven weeks in, the opposite has happened. Suddenly, investors woke up worrying that the much-hyped trade tariffs will stifle U.S. growth. Warnings signs are flashing in both hard data (U.S. personal consumption posted its steepest drop in four years last month, while manufacturers report sharp declines in new orders) and soft data (consumer confidence has fallen for three straight months, while inflation expectations have surged). Everywhere you look, 'America First' bets are backfiring. The dark side of deficits Yet, as Trump's economic agenda comes into sharper focus, a key priority is emerging: deficit reduction. And make no mistake – this is more than rhetoric. Treasury Secretary Scott Bessent's strategy aims to shrink the budget deficit from nearly 7% to 3% through spending cuts, particularly in government employment and welfare programs. Supply-side measures like deregulation and corporate tax cuts round out the playbook. But here's the rub: For markets, deficits matter. Government spending has a habit of finding its way into corporate profits. While high deficits can be problematic in the long run, they tend to boost economic growth and fuel investor optimism while the spending is in play. Over the past decade, a key driver of U.S. economic outperformance has been fiscal stimulus. If Washington meaningfully reins in its budget, U.S. corporate profit margins are likely to take a hit. Fiscal bazookas abroad Meanwhile, U.S. foreign policy is forcing a dramatic shift abroad. European politicians are responding with fiscal firepower, including bold commitments to defense spending that have already lifted regional asset prices. In a defining moment for Germany – and by extension, the European Union – coalition leaders have agreed to break free from constitutional budget constraints, clearing the way for a colossal €500 billion infrastructure and defense spending plan. These measures amount to 11.4% of Germany's GDP – enough to stave off recession risks and rebalance the economy away from its reliance on exports. The significance of this shift cannot be overstated. The Eurozone's stagnation in the 2010s was shaped by two forces: (i) a massive deleveraging cycle in Southern Europe after the credit-fueled boom of the 2000s; and (ii) self-imposed fiscal austerity in Northern Europe. Now, both trends have run their course, setting the stage for a reflationary boom in the second half of the 2020s. Elsewhere, China's fiscal policy is turning stimulative. Beijing just raised its budget deficit to the highest level in over three decades, unleashing 5.66 trillion yuan ($780 billion) in fiscal stimulus – roughly 4% of GDP. Importantly, this year's economic roadmap puts consumer spending at the top of the agenda for the first time since 2012. The message is clear: domestic demand is now China's focal point. While the magnitude of fiscal expansion in Germany and China remains uncertain, the direction of travel is now unmistakable: away from balanced-budget orthodoxy. Global investors are taking notice, and capital is rotating accordingly. Non-U.S. equities are markedly outperforming their American counterparts in 2025. Investment implications As discussed in last month's 'Ask Forstrong,' markets are in the midst a profound regime shift. Two fundamental emotions – fear and greed – are shaping the transition. On the fear side, investors are finally questioning the wisdom of concentrating so heavily in richly-valued U.S. tech stocks. The post-global financial crisis surge has made U.S. equities nearly two-thirds of the world's investable stock market – an extreme weighting that introduces substantial risk. On the greed side, a new narrative is taking hold. Investors are warming to the idea that stimulus measures in non-U.S. economies – unleashed in response to Trump's trade stance – could outweigh the negative effects of protectionism. Sentiment is shifting. Instead of fixating on risks in these regions, investors are seeing return potential. Animal spirits are stirring, and many international markets have quietly entered bull territory. Meanwhile, U.S. equity underperformance is already eroding dollar strength – not just because global investors are reallocating, but also due to fundamental economic effects. A weakening stock market hits U.S. household wealth. If this prompts Americans to cut spending, especially as fiscal policy tightens, U.S. growth will slow. That, in turn, will force the Federal Reserve into easier monetary settings relative to other economies. The result? A structurally weaker U.S. dollar. The investment landscape is shifting – and fast. Forstrong's globally diversified portfolios are positioned for what comes next: a world where protectionism reshapes capital flows and international markets emerge as the primary drivers of global returns. Tyler Mordy, CFA, is CEO and CIO of Forstrong Global Asset Management Inc., engaged in top-down strategy, investment policy, and securities selection. This article first appeared in Forstrong's Insights page. Used with permission. You can reach Tyler by phone at Forstrong Global, toll-free 1-888-419-6715, or by email at tmordy@ Follow Tyler on X at @TylerMordy and @ForstrongGlobal. Disclaimers Content © 2025 by Forstrong Global. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited. Used with permission. The foregoing is for general information purposes only and is the opinion of the writer. The author and clients of Forstrong Global Asset Management may have positions in securities mentioned. Performance statistics are calculated from documented actual investment strategies as set by Forstrong's Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of composite results for separately managed accounts. Actual performance of individual separate accounts may vary with average gross 'composite' performance statistics presented here due to client-specific portfolio differences with respect to size, inflow/outflow history, and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance numbers are net of total ETF expense ratios and custody fees, but before withholding taxes, transaction costs and other investment management and advisor fees. Commissions and management fees may be associated with exchange-traded funds. Please read the prospectus before investing. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.
