The Canadian Investor - The Most Popular Canadian ETFs

Episode Date: July 3, 2023

In this episode, Braden and Simon start off with a game of which company we’d rather own. We then have a look at which types of ETFs have seen the most inflows in Canada since the start of the year. Symbols of stocks discussed: XEC.TO, ZEB.TO, ZSP.TO, NFLX, DIS, SBUX, MCD, SHOP.TO, CSU.TO, CNR.TO, CP.TO, ABNB, BKNG, NVDA, TSLA, BCE.TO, LVMH, BRK-B, BLK, INTU, HD, LMT, UBER, DOL.TO, QSR.TO, SU.TO, MCO, SPGI Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  TCI meetup registration Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Bélanger. The Canadian Investor Podcast. Welcome into the show. My name is Brayden Dennis, as always joined by the legendary Simon Bélanger. Happy Canada Day to all. This comes out on Monday, July 3rd, right, Simon? 3rd? That's correct. Yeah.

Okay. So that is the Monday holiday. And so Saturday was Canada Day. So happy Canada Day to all. This is the Canadian Investor Podcast. And we are doing a Canada Day special. We're playing a game of Would You Rather? There is a brand new game and it's going to be a hit.

I already know. So here's how the game works. I'm going to be a hit. I already know. So this, here's how the game works. I'm going to list two tickers for you, Simone. And at today's valuation, you're going to tell me what you would rather buy. You're going to answer first. And then I will answer. You have not seen these ahead of time. Uh, and I haven't really decided what I'd rather own either. So it's going to be off the cuff. This is certainly non-investment advice. So should I be looking at their valuation as you say the names or just on top of my head? I started writing them out.

And then as you can tell, I stopped. Yeah, maybe take a look, maybe pull up strato you know whatever uh look this is certainly non-investment advice we may know the ins and outs of some of these businesses and much less to very little to none about another business so given that let's fire it up some of these are very similar businesses. Some of them are completely different, but that's what makes it fun. And, uh, you know, some are industry, some are industry agnostic. All right. You with me? You got the rules? Yeah. Yeah. Okay. Uh, and feel free, you know, take your time. You don't have to rapid fire.

Give us your thoughts, see what you're seeing in the numbers. That's kind of the whole point is that it's not like you've studied this and you look through this. It's seeing how you and I think about this together. All right. So first one, Netflix or Disney? What would you rather? Today, Netflix trades out of 25 times. I'll give you a forward ev to ebita and disney trades at a 12 and a half forward enterprise value to ebita so exactly double the multiple on netflix what would you rather um yeah i mean i'm a bit torn here i'd probably go with disney just because they have a wider range of assets so they also have like the theme parks that that do quite well and can actually support the business when

the streaming side and the content side is not performing as well they can also repurpose some of the content to the theme parks what they've done historically so I would probably go Disney but the one concern I don't have them in front of me but I'm trying to pull it up I know they do have a lot of debt and that would be a big concern with Disney is that it could really impact their earnings going forward depending on what rate they refinance that debt so that's that's my biggest concern I don't think Netflix has as much debt on the balance sheet, but if I had to choose, you know, on the spot, I would go, I think Disney. Okay. I will take the counter side of the

coin. I will pick Netflix. We've seen really good results already out of the ad supported business and really good results already out of the password sharing crackdown. Have you got hit with that yet? I got hit with that. Oh, yeah. Yeah. We're paying now for basically the account of both our parents. So, yeah. So, you got the short end of the stick.

Okay, got it. So, now you're the guy paying for everyone's Netflix. Dude, why was the bear case that password sharing would lower subs? Like people would cancel because, and I'm like, the person who's already paying is not going to stop paying just because, you know, their brother or uncle can't use it anymore. Like that never made any sense to me. I think the biggest risk was that you'd have people that were not using the ad supported tier and were gonna downgrade and then

potentially lower revenues based on that but um i haven't seen the figures recently i think it's performing pretty well even on a economics basis so yeah. All right. Let's do the, I'll say, fast service industry, the QSR industry, quick service industry. Starbucks or McDonald's today? So what are we looking at for valuations? Should I just tell you the market caps? Would that help a little bit? Yeah, let's do market cap. And then, yeah, because it'll be, I think, a really

long segment. Yeah. Yeah. We have to look. I definitely want to do the ETF segment too. We have coming up because I think that'll be a fun one too. All right, so Starbucks today trades at a, oh God, $113 billion. And McDonald's is, I'd probably double that at, I'll start prepping them too for the next one. And now my computer's frozen. That's just wonderful. That's just what you love to see here. Oh, that's okay. Let me take it from here for that.

$212, $212. $212. Okay, so $118 and $8 and 212 huh that's right okay so i mean i think i would go mcdonald's here uh the main reason being is you're probably not gonna see as much growth as starbucks because starbucks i think is betting heavily on the chinese market so they've been expanding heavily over there however mcdonald is a great place, especially if you think that we're going to be entering a slowdown in the economy and a recession. I think it's the Dollarama food play where, you know, people still need to eat. And even though McDonald's may increase their prices slightly, they're still going to be better value than most options out there. And they've historically done pretty well even in downturn so i'm gonna go with mcdonald's for that reason i was checking out the valuations and they're almost identical for both of them so p around 30 and price of free castle around like high 30s low 40s

interesting okay i i think we're in agreement i think we're in agreement. I know that the Starbucks playbook of them opening an egregious amount of stores in China right now, I think it's probably going to work. But McDonald's, I was going to say has such good pricing power, but they have both unbelievable... Starbucks is like the icon of pricing power. This one, I think I'm pretty torn. Honestly, you flip a coin and you told me it's one of them that power. This one, I think I'm pretty torn. I honestly, you flip a coin and you told me it's one of them that I had to own. I would say, I would say, sure. If I had 10 seconds to decide, I would go with the golden arches.

All right. Shopify. I wanted to pick two Canadian tech names and the biggest. So Shopify at 108 billion CAD versus Constellation Software at 56 I don't even have to answer this one but you're gonna answer it yeah so I own Shopify I mean if I had to pick I think I would probably I think I would probably go consolation just because wow look at that yeah just because I think Shopify's valuation has gone a little bit ahead of itself once more so I do own it I don't intend on selling it but I think consolation more reasonable valuation not as also not a cheap stock but yeah no I know I'm looking at the price so price of free cash flow of 31 and then i guess

shopify no no data there but yeah i think you need to have free cash flow for that exactly um yeah so i think i would go consolation just for the overall kind of mix of growth but also kind of better diversification slash safety around it so that's probably the yeah and more low key from for investors in general if you ask american investor if they know shopify or consolation uh probably nine out of ten will say that they know shopify and maybe one out of ten will say that they know Constellation. Yep. Very true. Even at 56 billion in market cap, it trades very under the radar only on the TSX. Well, you know what my answer is. Yeah. Because 56% of my portfolio is in the hands of beautiful Mark Leonard and the Constellation empire. All right, CN Rail and CP Rail. CN is

$106 billion in market cap. CP closing that gap, $98 billion in market cap. So very, very similar. Obviously, very, very similar businesses. But I'd say now at a bit of a different trajectory given what's happened with kc southern yeah definitely so cn rail is definitely trading significantly cheaper than cp um so i think i mean i own canadian national rail and that would probably be my play obviously it's nice that uh they cp did the acquisition for k City Southern, got approved by regulators with some little caveats, but overall, nothing too major here. But I just think, especially if the economy takes a little bit of a downturn, I like the fact that Canadian

National Rail has tons of free cash flow and they can decide whether they want to return that to shareholders paying down debt. CP on the other end took on a lot of debt to acquire Kansas City Southern. So I think that's a bit of a risk. Definitely there's more growth there, but with the current macroeconomic environment, I think I would head towards the safer play, better balance sheet versus the more potential growth play. Fair enough. I think that the CP is set up to do extremely well. The multiple difference, I don't think is quite justified. But given that, given my age and risk tolerance and how safe these businesses are in general, I like the new, uh, the new coverage that CP has today. All right.

Airbnb and booking holdings. Airbnb is an 82 billion in market cap business. Booking holdings is a hundred billion for those less familiar with booking holdings. They have bookinging.com, Kayak. What's another big – is it like Hotels.com? A bunch of different aggregators for the travel business, both on the accommodation side and rental car side, as well as flight aggregation. So they basically have assets that will cover your entire trip if you want a big competitor to Expedia. Yeah, that's Airbnb hands down.

Naughty. It's a no-brainer for me, mainly because if there is a company out of the two that will be disrupted by AI, it's going to be booking holdings. Because ChatGPT, for example, you can already use it to help you kind of plan trips. you can already use it and to help you kind of plan trips. And you can even have it so you can book the different things directly and bypass a booking holdings, for example, whereas Airbnb, I mean, it could be disrupted a little bit. But if you're thinking about people that don't have tons of vacation property, maybe just one property that they're putting there, I mean, they're just putting it there. They're not putting it on several other side. They don't have a side of their own. Whereas, you know, an Expedia or booking holdings in this situation, usually they're just offering things that you could go straight to the provider to get anyways. And that's where I think the the chat GPT disruption could really come into. So I would actually, personally, I would not touch with a 10-foot bowl booking holdings or Nixpedia right now. Yeah, I think that there's some risk to the

aggregators. Airbnb, for me, is the clear pick, just given the optionality. And in the management team, I think Brian Chesky is probably one of the best founder-led CEOs today in all of public markets. I think he's fantastic. I think he's going to drive this business to a lot bigger than it already is today. I actually think booking is an incredible business. But given all those things I've said, it's going to the Airbnb. Also probably one of the strongest brands in the world right now. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using

Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com.

is questtrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host.

That is airbnb.ca forward slash host. That is Airbnb.ca forward slash host. All right. I haven't been writing my data here. I got to put it in. S&P Global versus Moody's Corporation, the two credit rating agencies businesses. Their business today, both of them is about 50% credit rating agency and 50% SaaS tools to help investors manage risk with equities, credit, stuff like that. Yeah.

I mean, I'm looking at both and it looks like Moody's is definitely, actually, S&P is trading at a little better valuation. It's on a tasty drawdown right now. Yeah, so it's quite similar for both. But in terms of at least revenue growth, S&P has done a bit better recently. And it's trading, I mean, similar price to earnings, but price to fee cash flow slightly less than Moody's. So I probably go just based on that with S&P Global. That would be more of a valuation thing for me just because they're very similar businesses. And at that point,

I think that's where evaluation comes in. Yeah. I own them both equal weighted. And I'll tell you what, I am in the process of moving the entire allocation to just SPGI. I think the price is right today. It's on a nice little drawdown. It's one of the best businesses on planet Earth. The indices business, the S&P 500 is made by them. And I am in the analytics business here. And Capital IQ has some of the best, most robust APIs. I just gave them a lot of money, Simone. I need to hedge my bets and own some of the stock here. I think that they are really well positioned here. Moody's as well on the credit rating agencies,

but they both have that in this like pseudo duopoly. I think the rest of the assets, now that they've also acquired InfoMarket, IHS Market with ticker Info, they're really, really well positioned here. All right, two Canadian names, two of the boomer stocks, Bell versus Suncor.

Oh, wow. Yeah, Bell, completely different businesses too. They're completely different industries, but I see them in the exact same portfolio side by side. Yeah, what's funny too is we didn't go over that in the latest earnings and news, but Suncor got hacked, right? So they got hacked, I think it was yesterday or today, where you couldn't even use at the Petro-Canada station. People couldn't use cards. They had to pay cash. Oh, my God. Really?

Oh, yeah. Yeah, I'm not kidding. I didn't even hear about this. Oh, yeah. So it's pretty funny that you picked that one. I would, I don't know. This is a hard one. I think I would go even despite that Suncor just because I think oil, I mean, I've been adding quite a bit to Canadian natural resources.

I haven't started a position in Suncor, but I do think that right now oil prices are a bit depressed compared to what they could potentially be in more the medium to long term. A lot of people are predicting a global recession coming up, which is putting pressure on the oil prices. And even though Suncor has had some safety and management issues in the last little while, I think they're pretty well positioned overall going forward. Whereas a Bell, I mean, obviously it's part of the big telecoms in Canada,

but telecoms just have to invest heavily in their infrastructure. Not that Suncor doesn't. It's also capital intensive. But I just see more upside personally in Suncor than a Bell. I do too. But I'm going to take that. I mean, you're getting paid to hold both of these things. They both yield 6 plus percent. You're not hoping on a lot of growth for either of them.

But given that, Bell is just so stable um you know their assets it's a telco can i pick the bailout answer of neither and run uh but if i had to pick i'm picking bell it's your segment so you can't cop out. Two more names, Restaurant Brands International or Dollarama. Oh my God, I've been burned by Dollarama before. So I thought they would have issues raising prices in the pandemic and they've done quite well. So props to you, kind of predicted that. And that kind of goes to my McDonald's over a Starbucks too.

I think there's, yeah, I mean, it's a very hard, I kind of hesitate because I think if Restaurant Brian Internationals does things right, there could potentially be value in their brands. But I think it's, I don't know, I just have the feeling it's somewhat stagnant as a business. It's always the same thing every year is like one one chain could be kind of pulling it up one year it'll be Popeyes the other year it'll be Tim Morton's and it's rarely Burger King but it's still you know that's kind of the reoccurring thing is like they never fire on all cylinders all their brands it seems like at the same time exactly it's always like one of them

brings up the rest so i'm gonna go with dollarama i know that's not trading cheaply but they've been resilient and inflation has not had any impact on them if i remember correctly their margins are doing really well they're able to pass on that price to consumers and consumers. The reality is, is they don't have really better option in terms of low cost. So I'm going to go to Dollarama. Four dollars turns to five dollar items. Five dollar items turns to six dollar items will be, you know, people will be banging the drum. Oh, there's no way they can do six dollar items. And you'll hear me on the podcast.

Yes, they will. And people will pay for them because it's still a better value proposition. Having said that, Restaurant Brands International, for those who are unfamiliar with the business as a hold co, you'll be very familiar with Tim Hortons, Popeyes, and Burger King, and also now Firehouse Subs. So those are their four brands. and also now Firehouse Subs. So those are their four brands. I don't, if you asked me this question 10 years ago,

it's Dollarama. If you ask me this question now, Dollarama has hit a bit of a saturation point. They're still opening about 65, almost exactly stores per year, which is fine. So there's still a lot of room for growth, but that number is not scaling. This business is not increasing. They've opened exactly 65 stores in a row for almost like eight years in a row. They flex their pricing power. It's a wonderful business, but it's purely a bet on Canada that I don't want to make. I like the optionality for RBI to continue to acquire

a little bit more aggressively once they get that balance sheet a little bit more under control to grow outside globally. I don't think that Tim Horton's brand is going to grow, but the Popeye's brand has a lot of legs. And Burger King, despite what you think, it's everywhere in Europe. And it's actually good in Europe because it's horrendous here. You heard it from here. Okay. Well, one thing I'll add, though, for that is our population growth is quite high, right? As everyone knows, we reached 40 million, I think, a couple of days ago, whatever.

As everyone knows, we reached 40 million, I think, a couple of days ago, whatever. So that's going to be definitely creating some growth opportunities for a Dollarama. So I think that is part of the potential growth. Because if you have new people coming in, you know, and sometimes they're living on budgets too, Dollarama, in my mind, is a clear winner from that. Yes, but you could argue that tim hortons is capturing that upside this is true yeah yeah all right the people want to know for this one the two bubbliest bro-iest trader stocks around nvidia at 1 trillion in market cap or tesla $785 billion? I think I'd go Nvidia here without hesitation, actually, because the competition is so strong in the EV space. Although we saw Lordstown, I think, filing for bankruptcy today. But again, you're seeing the big builders, whether it's Volkswagen, Ford, GM, Toyota they're all investing heavily in EV

and at the end of the day I think you're gonna see you know Tesla will continue doing well but you're just gonna see more and more competition in this space so I think it's putting a bit of a cap on the potential returns for Tesla and then you have on you know the other hand Nvidia which is clearly in a league of its own at least right now in terms of AI GPUs that are being used I think AMD is definitely has announced a few things recently clearly the valuation is quite high it's also high for Tesla too but I think Nvidia is more of a stronghold in terms of what they do best with one potential competitor. I don't think Intel will get as bleeped together in time to be a competitor here. And so, yeah, I think I'm just kind of seeing it more as competition and just

forgetting the valuation for a second. And I think that's why NVIDIA, I'd pick them. They have an edge in my view. Yeah, that's fair enough. I mean, you kind of got to compare them business to business because you can't get there on valuation with any of them. You can't get there on price with either of these businesses. Personally, I think Tesla is actually probably a little bit more reasonable, but NVIDIA has probably higher growth. Look, Tesla has done some really good things with their infrastructure. They have that first mover advantage.

They have spectacular margins for an auto business. You've got to give them a lot of credit. And you've seen Ford GM now hopping on the infrastructure that Tesla has built out. So that's a new revenue stream for the business. So, you know, kind of executing as you'd hope a business this highly valued is. But as you mentioned, it's a car company. It is a car company. They have this very interesting infrastructure business on the side.

But that's not where the revenues or gross profit comes from. It comes from the cars. And I don't own car companies unless maybe the most elite luxury businesses that are actually not car companies. For instance, Ferrari is not a car company. It is a luxury flex business where you buy them to status signal, not to drive them. I would maybe consider owning Porsche as well, which spun out recently. But I'm not owning any other car companies. So for that reason, I am out and into the most bubbly stock of all time. All right, let's go into Berkshire Hathathaway versus lvmh two conglomerates you have

very humble mr buffett versus the very flashy lvmh bernard arnold i'm gonna go with uh buffett here yeah and just i it's just his way of making bets that are against the grain that uh for the most part will pan out obviously he's not you know he's not without fault he's made some bets that did not work out over time but he's just really good at finding deals whether it's you know preferred equity convertible debt sometimes all different kind of deals as you know he's as you know nice yeah as nice as he seems he's done some really solid deals in the past whether it was uh thinking about the great financial crisis like just some of the things he's able to do like he he looks like a very nice guy but he's also you know a shark in terms of doing

business deals and being able to do some highly profitable and high upside deals that also have for the most part a pretty high floor too even if they don't pan out exactly as he sees. Typically, there are deals that even if it goes not as planned, they'll end up doing just fine. So I'm going to go with Buffett and the fact that you can just sit back and own the shares and basically, you know, you don't even have to look about it and worry about it. Yeah, that's right. I think that that's right.

LVMH, on paper, I'd love to own that portfolio of brands for sure. It's just true luxury, terrific capital allocator. We're talking about two of the best capital allocators to ever do it here. I do like Berkshire a little bit better because of the price. LVMH is in a very expensive stock. It sells luxury goods at a luxury price on the stock. And so I think you can probably map out some better IRRs with Buffett and the Berkshire clan there. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense, and with them you can buy all North American ETFs,

not just a few select ones, all commission-free, so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com.

Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still

focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. All right. Lockheed Martin, the defense contractor versus boeing they both make planes but one one gets you from point a to point b one is uh the most advanced piece of technology and an outright killing machine yeah i mean without i'll just say I'm putting aside any social conscience that I have here with my answer. ESG out the window. Yeah, well, yeah, not even ESG, but, you know, the military industrial complex, which I've always had some issues with. But I think, unfortunately, the reality of the world we live in, I would probably go with Lockheed Martin. Because Boeing also has had some pretty serious scandals.

If we're thinking about the 737 MAX with the software that was in there, a couple of major plane crashes, let's say how it is, that happened and some quality control issues that they've had in the past five, six years. that they've had in the past like five, six years. They're obviously in a duopoly with Airbus, so they're not going anywhere. But I think their reputation has definitely been affected and damaged. It's not, you know, I think it's going to be a good business going forward. But I think the edge here goes to Airbus if you're thinking about the duopoly. And for that reason, I think I would go, unfortunately,

with the industrial military complex, which, yeah, I mean, unfortunately, we seem to have a knack to get into wars, and a company like Lockheed Martin benefits from that. And even if we don't get into wars, we need to make sure if one happens that we're prepared. Yeah. And how many F-35s did Canada just buy like six months ago? They bought like, how do I look that up?

Canada ordered an egregious amount of F-35s. Canada, they had to replace the fleet, right? Yeah. Canada they had to replace the fleet right yeah they used to have CF-18s that are I think they've been basically looking to change them for close to 20 years yeah yeah so the 8F35s I used to 88 okay so I used to work at the Canadian War Museum as a guide and they were talking about like getting the contract out to replace them then and that was in the mid 2000s so just to tell you how long it's been because these things take time to build they're very expensive contracts too and obviously military spending is not always popular so it's taking time and i know that those cf18s are um they're definitely towards the end

of their life yeah 80 this is in uh january this was 88 f35s order of 14.2 billion dollars so and how's that for yeah that's probably and there's probably a maintenance contract in there too on top of that. Like, I don't know if that's a full contract value, if it includes like a certain amount of years for maintenance. But usually that, I'm not a military expert, but I'm pretty sure usually those contracts will include some maintenance built in. But then, you know, they may have to re-up that in the future. built in but then you know they may have to re-up that in the future anyways if someone knows let us know it's not uh i i haven't really studied uh military companies like too much in the past yeah the united states has a planned procurement of total 1762 f-35as yeah Yeah, that sounds about right. And we're like, oh, we got 88, baby, let's go. No, I mean, I'm going with you here. I think Lockheed is, look, it's an impressive technology company,

is what it is. They build some of the most advanced hardware, software machines advanced, hardware, software, machines that humans have ever constructed. That's just flat out. I don't care what they do in terms of your opinion on that. They are one of the most impressive technology companies that we have on planet Earth. And they're just so locked in. There's never been a president that spent less on defense than the previous one. And that trend is not going to change depending on who's sitting in the Oval Office. That trend is not going to change. All right, let's go different here.

We'll just do two more here, Simone, and then we'll go to the ETF thing. Yeah. BlackRock or Intuit? We got financials giant versus software giant blackrock is 102 billion in market cap today intuit is 129 uh yeah that's a good question um well i don't have like i haven't pulled the metrics on this one. I'm gonna, wow, that's a really good one. I really, I mean, they're both gonna be affected

if there is a market downturn because chances are if there's a market downturn, asset value goes down, total asset under management. So AUM for BlackRock will go down and then you can relate that to Intuit, which of course, if there's a downturn, less smaller businesses. And I guess the other thing that could affect Intuit is the CRA potentially coming up with an automatic filing system. I think they were talking about that.

And I think the U.S. may be talking about something like that, too. So it would impact revenues for TurboTax. I'm going to go, as I'm talking about that, I was going to say Intuit. And as I was talking, I'm going to switch over to BlackRock. Fair enough. For me, Intuit is this business with an unbelievable asset in QuickBooks. And then their TurboTax and their mint product. I don't love, and I think that MailChimp is overcharging and I see people in the software

community switching off. We switched off MailChimp just a few months ago because they were trying to charge me like $2 thousand dollars a month to have my email service with MailChimp I switched to a better product that does the exact same thing for 300 a month yeah and that's not even a cheap one like you can I could I could go to probably a 50 a box yeah so they acquired it they're flexing the pricing power. It's probably working in the numbers, but what gives, right?

Like, uh, yeah, the stickiness, I mean, you know, the, this better than me,

but I feel like this stickiness is not like super high, right? There's just, there seems to be like decent amount of competition in those mail services, mailing list services. So I just, I don't know. I think they have to be careful decent amount of competition in those mail services mailing list services so i just i don't know i think they have to be careful on that one it's not like a quig books where would be just a pain to change everything i agree i agree so it's like if you spun that off i'd buy it but the rest of the assets i'm not in love with for those reasons i'm going to go to blackrock all right last one simone uber

at 90 billion in market cap or ford at 60 billion in market cap i mean i think uh i think i would go uber for that one um i know the valuation i don't have it up i'm assuming uber is, way higher in terms of valuation. But it kind of goes back. Yeah, exactly. So it kind of goes back to what I was saying earlier with NVIDIA, where I think Uber is the clear leader in ride sharing. And you're looking at even a Lyft, which, you know, does not have that many different verticals. Looks like they're going to die.

Yeah, exactly. I've never used Lyft. I've only used Uber. And they have Uber One, their subscription service. Obviously, with food delivery, they seem to have a pretty good, you know, idea of the business model. And clearly, if autonomous vehicles do become a thing, that could be an added benefit to their bottom line. So I'm going to go Uber just because despite the valuation, they have such a leader leading position. And we've seen other services, even if you just think about food delivery, so many of them have tried and then, you know,

fizzled out. And Uber is one of the ones that's still there. Yeah, I totally, totally agree. I mean, look at the mindshare that it possesses and you're seeing their main competitor Lyft fall to the waste. It might not exist in a year or two with the trajectory that they're on. So I think that that's the clear winner here. I think that the business definitely has its issues, but they're showing that they can live on without the VC-backed cash burn until perpetuity, kind of like an Airbnb has shown. I think Uber has done the same. So I'm with you on that one. And for the main reason that I don't own a car company. So I think that that's just speech for itself. Yeah. Ford could be a value play. It's just, again, lots of competition,

the space, capital heavy, capital extensive, and Uber is just a clear leader. So I think just because of that, me i kind of forget about the valuation a little bit i want one of those f uh ford f-150 electric lightning yeah the lightning they look sick i saw one in person downtown oakville like two or three weeks weeks ago and uh it pretty sweet. I would definitely get one of those. Yeah. All right. Let's do it. That took way longer than expected, but it's fun. All right. Let's do it. You got ETF flows report. Yeah, exactly. So this one is a fun report. I think honestly, I'll probably try to look at it as much like on a monthly basis just because I think it's really

interesting to see where things are going. So National Bank comes out with a Canadian ETF flow report every month. And I was really, you know, I just came across it just, you know, randomly. And there's a couple of takeaways that are really interesting here. so 2.6 billion flowed into canadian etfs in may obviously when you're talking about canadian etfs these are canadian listed etf but they could be investing in uh foreign equities like the u.s so keep that in mind so that's by listing what's that it's by listing uh what do you mean by canadian like it's like's like Canadian ETF meaning that it's a Canadian listed. Listed ETF. Yeah, yeah.

Okay, I'm with you. Yeah, you got it. Exactly. And the first thing in terms of flows, it's actually quite interesting. So in terms of flows in May, it's been somewhat consistent with a year before, pretty similar in terms of inflows down from earlier in the year, but still a decent amount. So it was dominated by fixed income, which had inflows of $1.9 billion with money market funds leading the way with $1 billion in inflows. And we've talked about that on the podcast before, as there really seems to be a shift towards money market funds because people can just get a higher yield on their cash for

the most part because they're just not getting that from Canadian banks. XCC.TO, the iShares emerging market saw the most inflows in the month at 377 million. Z the bmo equal weight bank index saw the second most at 319 million so canadians do like their banks zsp bmo snp 500 and zea the developed market uh etf saw the most outflows at 310 million each and there were 27 new etfs launched in canada in may the most since october 2022 so before i go on so any comments on that in terms of what we're seeing for may that graph you have here look how persistent net inflows were through 2022 only june had through 2022 only june had net outflow that was kind of like probably near the bottom there yeah yeah really persistent uh net outflows yeah it's been pretty consistent i mean there was also january that had that um which i don't know if it's i guess yeah it's not reoccurring because

january of the previous year was different but it's, I guess, yeah, it's not reoccurring because January of the previous year was different. But it's just interesting seeing the total inflows for sure. Yeah, people load up at the end of year. That's like pretty common for self-directed investors to see that there in December. What's with the net outflows in January? I don't know. Yeah, because the year before in 2022 there was like significant significant inflows too so uh that's interesting i'm not sure yeah yeah especially off the backs of like really high flows at the end of 2022 i think the markets were just a bit were they down in january i think so right uh markets were a bit down as a whole, so it could have been a sentiment thing.

I'm checking now. Yeah. No, January, we kind of ripped. We kind of ripped in January. Well, you know, your guess is as good as mine. I'm not sure. Maybe people were like, oh, look, the market goes up for once. I'm going to sell.

They were so used to losing money on their inflows in 2022. And they had an up month and they're like, okay, I'm out of this. No, exactly. And now what's really interesting is when you look at the year to date data. So since the beginning of the year, there has been 15.3 billion of net inflows into Canadian ETFs. Fixed income ETFs have had inflows of 9.2 billion. So they've dominated those inflows, which is not surprising. Higher interest rates, it's really encouraging people to go into that fixed income, especially when you're talking about money market funds, which are clearly one of the big parts here. US.S. equities ETFs, and this one is actually surprising, had outflows of $1.6 billion since the beginning of the year. Are you surprised by that one? This is the U.S. equity. That's one that I'm highlighting here.

Yeah, exactly. U.S. equity ETFs had outflows of 1.6 billion since the beginning of the year? Yeah, yeah. While there's been 15.3 net inflows in Canadian ETFs? Yeah. It's pretty crazy, huh? Wow. So it seems to me like people buying ETFs are actually going against the grain because they're going into Canadian ETFs, which are doing way worse than U.S. equity ETFs are actually going against the grain because they're going into Canadian ETFs,

which are doing way worse than US equity ETFs. In the worst months of 2022, we had, of performance, we had huge inflows. You see what I'm saying? It's not what I would, it's literally the opposite of what I would expect. It's not people piling in. It's people taking profit, I guess. Yeah, and year to date, there's just three main segments that saw outflows. So the U.S. equity was one of them with the most. The second one was commodities, which was just a little bit at $43 million. just a little bit at 43 million and then there was crypto asset etf that had outflows of 302 million which also it's not surprising looking at how the crypto market has been uh but the us one

i wanted your take because it's very surprising when i saw that i was quite surprised yeah yeah i wonder i wonder if they're like swapping it out for individual. They're like buying in video with it. I don't know. I mean, it could be. It could also just be that, you know, maybe people are just taking profits off the table because the U.S. I mean, if you've been invested in the S&P 500 for at least a couple of years, I mean, you're still, you know, any point this year, you were up quite a bit on your money. And it's possible, too, that people were just selling those to buy money market ETFs and lock in those gain and get 4 or 5 percent on interest. Right. So that's probably part of it, if I had to say.

Yeah. Yeah, the top inflows in those Canadian ones that you're about to talk about you're seeing yeah high interest savings total world high interest savings real assets bond uh banks index yeah yeah yeah exactly and you know if you're looking at the full year again, Canadian equity ETFs had inflows of pretty much the same as the U.S. at outflows. I don't think it's, you know, you can't really equate one for one here. Like I said, fixed income inflows have been so massive that I think they're probably taking a big chunk of the U.S. ones. But it's interesting to see that Canadian equity had inflows of 1.6 billion. International equities have had inflows of $4.7 billion as well.

So maybe people are also shifting a little bit of those U.S. equities for international. And obviously, crypto assets ETF have not performed well in terms of inflows and outflows. And the top three ETF providers in Canada have two-thirds of the market share in assets under management. And the top five own just shy of 80% of the market share. What was a little confusing was RBC iShare. They put them together. So I think because you can get RBC iShares, but you can also get just iShares. So I'm assuming they're just putting these two together because they put 28% here.

And iShares, for those who are not aware, it's BlackRock. BMO is at 25%. Vanguard is at 13%. Horizons at 7.3%. And CI, Galaxy, I believe, asset management is at 5.4%. And 61% of the assets under management are in equities, while 31% are in fixed income. So it's kind of funny, almost like kind of that 60-40 portfolio. The rest, I think, is just alternate assets and potentially, I think, cash as well. Any comments on that? The RBC iShares category, I don't get that. I'm so confused by that. Yeah, I was too. I'm assuming they're just putting them together.

I think that's what would make the most sense. Because RBC has RBC iShares ETF, but there's also iShares iShares ETF. That's my understanding, at least. I feel like they just put them together. Yeah, I think it's just a partnership between rbc and i shares uh but you know i know that blackrock has some canadian listed ones that have nothing to do with rbc either maybe there's some partnership that i have no idea about um bmo has a lot of market share here yeah definitely i knew they did well with their etfs but i i didn't think they'd be higher than vanguard to be honest like the first time i've

ever really seen this data so i'm not surprised blackrock's at the top but i thought that vanguard would be just shy behind them above bmo but that equal weighted bank etf prints money for them bro like unbelievable and i'll give it to bmo they have a pretty nice offering for like canadians and i think that's why they get a big chunk of that market share is they just you know they have more canadian offerings i think well they do then a vanguard vanguard doesn't that many. So I think for a lot of people, just they want to be able to buy something that's in Canadian dollars. And I think BMO has done a pretty good job

of having some diversification in there. And I think it shows in their market share. Thanks for listening to the podcast. Yeah, there's a couple. Yeah, before we go, you thought we were done. Psych, I thought you were done. Oh, you got two sexy tables here. Yeah, exactly. Well, the second one is the one I was talking earlier about the change in asset under management. And just a little side note here for the US equities

outflows. It may sound like a lot, but it's only 2% reduction in the total asset under management for those U.S. equity ETFs. So it's still not that much. But what's more interesting here is the top ETF inflows in May as of year to date, obviously end of May. So the biggest inflow was the C-High high savings etf saw two billion dollars in inflows and that's an increase of 39 for their asset under management and then if you go down to number three horizons high interest savings horizons horizons horizons okay anyways they had i you're so cute t-bone so they had 1.1 billion in inflows and that's an increase in 79 in their asset under management so you're clearly seeing here that you know those money uh or these are like high interest savings etf but I would think they count as money market ETFs here.

They are clearly leading the charge and there's a lot, there's other ones. I mean, I don't know if you're looking at it. I need one that kind of come jump to mind as you're looking at these top inflows.

I'm noticing people flight to HISA, high interest savings. Yeah. Flight to HISA and people trying to buy the dip on banks. Those are the two things I noticed the most. Yeah, exactly. And that's definitely true here. So it's an interesting report.

I'll put a link for people interested in the show notes if they want to have a look at it because I just kind of looked at the the things that I thought were the most interesting for the podcast but really interesting report if you enjoyed this let us know and we can look at it maybe do you know a segment every month looking at what's happening on the ETF front because it also gives a good indication on you know what people are just doing with their money in Canada because you don't have to be Canadian to invest in these ETFs. But let's be honest, I'm sure most of the money going into them is Canadian money. Oh, yeah. Yeah. If not all of it, most of it. Dude, I still don't understand this pretty

significant inflow in Canadian equities and big outflow, almost exact outflow of US equities. I can't wrap my head around that because the performance is the opposite of that. Yeah. And the last thing that's interesting here is if you look at that graphic, the market share of ETFs by geography. So Canada has 75 billion terms of equities related to ETF, 36% market share. And then the US has 71 billion with 34 market share, including the inflows and outflows year to date. So I think it still shows, as we discussed before, that kind of strong Canadian bias because Canada still owns a third of all asset under management for Canadian equities in terms of ETFs. Yeah, the Canadian home bias lives on for probably forever. And you can see it's alive and well here in the data. Is that the

episode? That's it. No more psych? No no more psych no more yeah so it's five more charts i need to show hold on uh thanks for listening to the show everyone we are here mondays and thursdays happy canada day to what we do here at the podcast, we are on page 234 of our fourth Google document. Of that's notes of stuff that we want to prepare and show for the podcast. Research that we do, graphs that we put together to show the listeners of this podcast. research that we do, graphs that we put together to show the listeners of this podcast. The reason that we're on the fourth Google Doc is because they've gotten so big that like a thousand pages of all the photos and graphs and everything, they break. You can't open them after a certain point.

So we have to keep starting new ones. So you can understand how much effort goes into the show so that it's well-researched and entertaining for everyone here listening. And to support the show for all that hard work, you can go to join TCI.com. That is our Patreon, where you see our monthly portfolio updates that are coming up, you know, very soon here being the end of the month. Or actually, no, this is going live July 3rd. So they're out. They're out right now.

Our July portfolio updates are out probably today. And go ahead and check that out. We'd really appreciate that. That is at joinTCI.com. We'll see you in a few days. Take care. The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make

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