The Canadian Investor - What the Oil Shock Means for Stocks, Gold & Rates with Bipan Rai

Episode Date: April 15, 2026

In this episode of The Canadian Investor Podcast, we welcome back Bipan Rai from BMO ETFs to break down one of the biggest macro stories of the year: the oil shock triggered by the Iran conflict and what it could mean for inflation, central banks, and investors. We discuss why this environment may look very different from 2022, whether the Bank of Canada and Federal Reserve are likely to stay on hold, and why markets may be underestimating downside risks to economic growth. We also cover why gold has struggled despite geopolitical turmoil, rising bond yields, and the surge in the US dollar. Finally, we dive into private credit stress, whether contagion risks are overblown, and where Bipin sees opportunities today—including commodities, diversification, and equal-weight strategies.   Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca 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  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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there's going to be some great opportunities for investors this has to be one of the biggest quarters I've seen from this company in quite some time Welcome back to the Canadian investor podcast. I'm Simone Berger. I'm back with Bippen, Rye, from BMO, ETFs. Bippen is great to have you back on the podcast. It's the second time. It's been three, four months,

although it feels like a couple of years in terms of the amount of stuff that's gone through in the macroeconomic world. So I'm happy to have you back. It's good to be back, Simone. Thank you for having me. Okay, so we'll get started because we were limited on time here. So I wanted to really, I know you're deep into the macroeconomic things that are going on right now. Obviously, I think the thing that's making headlines right now is the geopolitical, the oil shock, what's happening in the Middle East right now with the conflict in Iran triggering really a significant oil shock.

How major of a regime shift is it for the global economy? And what's your base case for the Canadian and the U.S. economy? And I guess globally, obviously, we're seeing different. impacts, especially in Asia with signs of shortages starting to happen. Yeah. I mean, it's a complicated question. And I hope you don't begrudge me, but I'm going to have to give you a complicated answer to it. That's okay.

Yeah. Anytime you're dealing with, you know, a really geopolitical shock that affects, you know, supply of commodities. I mean, that is something that, you know, we have to incorporate into our analysis in real time and really figure out and contextualize, you know, for our clients as to what's going on. And the problem here is that everyone's sort of looking at what's happening now and understanding and internalizing that, you know, if the straight of our moose is closed for an extended period of time or even if shipping activity is curtailed. And of course, you know, we do have this temporary ceasefire agreement between the two sides. I mean, the quick sort of jump is to frame this in terms of where we were in 2022, right? So again, in early 2022, obviously you had Russia invade the Ukraine that did lead to a period where, you know, we were concerned about. the potentially shortages in some commodities.

Of course, Europe was weaning itself away from Russian liquefied natural gas as an input into their energy. But, you know, keep in mind also, you know, coming out of the pandemic, I mean, we did have, you know, a fair bit of, I guess you could say that, you know, labor markets were a bit more tighter, you know, that there was a bit more excess demand already built into place. And so the easy answer there was that central banks were likely going to need to tighten aggressively to curtail any sort of un-pored inflationary pressures. I think we're in a different spot this time around, right? And, you know, if we are sort of heading into an environment where, you know, the conflict,

you know, hopefully it doesn't extend for a period of time, but if it does lead to, you know, shipping activity through the straight being curtailed for an extended period of time, you know, then, you know, we should probably weigh a little bit more on the downside risk to growth this time around relative to where we were in 2022. So I'm saying this because, you know, the swaps market and the way it prices both the Bank of Canada and the Federal Reserve, I mean, obviously they've moved quite considerably. They've moved to remove some of the cuts that were priced in for the Fed by the end of this year. For the Bank of Canada, believe it or not, we've actually got, you know, the decent chance of two hikes priced into the swaps market. And this is where we would push back and say it probably makes more sense for the Bank of Canada to remain on hold on balance from the rest of this year because it's not clear to us.

where we are in the macroeconomic cycle, that rate hikes will really be the solution to what, you know, this country needs on a go forward basis. So, you know, that's how we're framing things from a, from a sort of top down, you know, central bank perspective for both, you know, Canada and, you know, I guess if we want to talk about the United States, it probably makes sense that the Fed's on hold as well for the rest of this year. Yeah. Yeah. You know, in terms of what this means more broadly for the macro, to us, our strongest conviction is that inflation is likely to remain a fair bit more stickier than we expected heading into this year. And we had seen some progress made on inflation in both the U.S. and Canada. You know, we're thinking that, you know,

there's probably a decent chance that we were stuck where we are just slightly above the 2% targets for both the Bank Canada and the Federal Reserve. And again, that's not just a play on what's happening in the energy space. That's also an understanding that, again, you know, the restriction of shipping through our moves does filter through to other commodities. that matter for in terms of consumer prices more broadly. So it's not just the direct channel, it's also the indirect channels as well. Yeah. And is your base case almost an upwards inflationary pressure in the short term and then medium

to longer term, if this lasts for a while, more deflationary pressure because people just have a limited amount of money to spend, right? So if you're spending more on gas on filling up your car, that's a necessity, you're going and be cutting back elsewhere? I think you're on to something there. And it dovetails nicely with what I was describing earlier, the fact that, you know, we do have to really consider the downside risks of growth more acutely now than we did in early 2020.

And, you know, the reason for that is exactly what you said, Simul, is the fact that at this point, if we see higher energy prices, I mean, short term, I mean, the demand for that is going to be inelastic. But over the medium to long term, given the fact that we also have. additional risks that are piling on for our economy. You know, the big one obviously is the upcoming trade talks with the U.S. Also, let's not forget, you know, there are plenty of mortgages that are going to, that are due to be renewed at higher interest rates this year.

So, I mean, to us, it does feel like, you mean, if inflation, inflationary pressures remain stickier for longer, that households are going to cut back on discretionary spending elsewhere. I mean, a simple macroeconomic model would tell you that, given where we're starting from in terms of the overall economy here in Canada? So it might be, is the market missing something in terms of not pricing in some cuts or a 70% chance probability that the rate stay the same in the U.S., for example, by the end of this year, and I think just a 50-50 chance,

if we're looking all the way to June of 2027, is the market to focus on the inflationary pressures? I think in the near term, that's, that is accurate. And look, I mean, if we're talking about framing different macro, regimes, the most difficult one to frame is the stag inflationary regime. Because then, you know, then, you know, context is everything, right? So I mentioned earlier that the starting point matters. Well, if your starting point is, you know, an economy that still has a fair bit of excess slack, you know, then it stands to reason that you're probably going to, you know, really entertain closely the fact that your growth risks are to the downside, the longer inflationary pressures

remain higher. Whereas, you know, early 2022, I'd argue we were at a different starting point back then. there's excess demand, so you want it to lean a little bit more on the inflationary risks and the term. And I think you're right. I mean, I think in the short term, the markets have taken the view that inflation is the more acute risk. Yeah, that's fine. I mean, that's the knee-jerk reaction in the here and now in terms of what the eventual outcome is. I mean, we'd push back on the idea that rate hikes are going to be a solution for what really ails the economy here in Canada. We're not taking as much umbrage with the way, you know, pricing in swaps market has moved for the U.S. Just because, you know, heading into this year, we found it very, very hard to fathom that the U.S. economy was going to need three rate cuts.

So that was tied to our view that the underlying fundamentals in the U.S. look a little fair bit better. Yes, there is some degree of concern with respect to the labor market in the U.S. But we also have seen restrictive immigration policies that have really, you know, have meant, you know, obviously, some important factors to consider also for the labor force as well. And you know, you can make the argument that the unemployment rate has been higher and that should be a signal at the margin that the U.S. economy is having a harder time absorbing a new entrance into the labor force. But at this point, I mean, that doesn't really matter if we have more restrictions of immigration policies there and it's break-eas and levels of employment are trending lower anyway. So to us, it made a lot more

sense that, you know, we removed those rate cuts. We're not quite at the point where we're comfortable saying that the Fed should be in a rush to move in either direction. But again, there are other complications there that we could talk about too, including on the political side of things. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience, too, until we switched to the new EQ Bank business account.

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not trying to avoid fees. Ready to invest, head over toquestrade.com, open and fund your account with code TCI and receive $50. Conditions apply. Well, yeah, the political side of things. I'd love to hear what you have to say, especially with the investigation into Jerome Powell,

And my perception, I don't know if it's right. I'd love to hear what you have to say. But is it going to push Powell to stay on as a governor beyond his term longer than expected just to show the independence? Because at the end of the day, you would still have a vote, right? Even if you're not chair. And then you're seeing some Republican senators that are saying until the investigation is dropped. They won't approve Kevin Warsh, which was a little bit of surprise when we last talk. We were talking about Kevin Hassett.

So does that lack of clarity have an impact on market stability? What's your view and the view at BMO there in terms of how they're approaching that and the uncertainty, I guess the political uncertainty around the next Fed chair? Yeah. Just give me one second. Simone. I'm just going to look up exactly when this term as governor ends because this term as chair ends in May 2026, but governor, okay, January 3rd. Okay. So let's frame this in a couple of ways, right?

So we know that, you know, this speaks to some of the nuance that I think you're getting to, Simone. If we're talking about, you know, Chair Powell's role at the Federal Reserve, I mean, he really has different rules, right? Obviously, the one that most people are familiar with is the fact that he's the chair of the FOMC. I think what's less appreciated is that in addition to that role, he also is, you know, a governor at the FOMC as well. And, of course, that has different responsibilities as a, you know, not just chairing the Federal Open Markets Committee on its own. And so, you know, the interesting thing here is that his term as, you know, the chair of the FOMC ends this May. I think, you know, people do understand that. Now, his term as governor actually expires at the end of January in 2028.

So, you know, what that means is that effectively, I mean, he'll be on the board for at least another year and a half, partaking in the decision-making process. Now, you know, it's, it's, that's important to contextualize because, obviously, obviously it will matter in terms of the majority vote and how that proceeds. But something else that we should always be mindful of as well is that the FOMC is but one vote. And it's legally mandated at the Federal Reserve Act that the majority decision is the one that's executed insofar as monetary policy is concerned.

So in either or scenario, I don't think the market is really all that concerned at this point because there are a number of orthodox voices on the FOMC, whether they're regional presidents or they're on the board of the Fed, I mean, you know, the votes there tend to stay a little bit more, or at least the thinking there is a little bit more orthodox as opposed to really be sort of influenced by politics. So at this point, I don't think the market really is paying all that much attention to it because it is a well-understood risk at this point.

And also there are structural reasons, fairly strong structural regions at this point that, you know, I don't think politics is going to filter into FMC decisions. Yeah, do you have to think if he stays on, you'll probably still have even not being the chair like a decent amount of sway, right, in terms of maybe influencing some other members on the board of governor? I mean, he does have a fair bit of gravitas if you are the chair, but of course I've never sat in the FMC.

So these are fairly, I mean, I would say most of them, given the fact that they are. are PhD economists. They do have substantial amount of gravitas in particular areas within the economics realm. Of course, having power there as a voice matters, but let's forget, he's also not a traditional economist. He's a lawyer by trade, worked in private equity for a long time. And so he was really a fantastic consensus builder and a great communicator, if I may say so myself, relative to some of the other Fed chairs in the past. So he brought a bit of a different skill set. But, you know, that's not to say that he won't matter, of course. But, you know, he is at the very least somebody that we can say is on the orthodox side of things.

Yeah. And kind of moving a little bit from the Federal Reserve, just I wanted to get your take on how you've, your reaction to how the markets have moved this year. So not only, you know, the stock market, but also we saw U.S. bond yields in general. So the longer term bond yields really rising since the Iran war started. pressure on gold and materials, pressure on equities, a rising U.S. dollar versus other currencies. Is it really as simple as just saying it's a liquidity drain because you have institutions, countries that need to get U.S. dollars, whichever way they can to secure energy at whatever price? Is that the way to put it or do you have a different view on that?

So, I mean, think about what happens whenever we see a meaningful shock, right? So two things happen. One is that any sort of excess positions that are held on the books, usually risk managers will offset those to get, you know, to curb that excess positioning and get it closer to the benchmark. The second thing is that people will generally, you know, pay a premium for liquidity and and havenness, let's say. And I think, you know, the idea of liquidity and haven are fairly intertwined.

And that's, you know, one of the reasons why the US dollar has done as well as it has over the past month since the conflict started. So I think that's the reason to, that's, that's the fundamental way to understand the movements over the past month, I should say, really since the conflict started. So remember that in the two months, you know, from the start of this year to the start of the conflict, you know, there were several different positions and trades and themes that we were paying attention to, including the broadening out theme, including, you know, higher precious metal prices as well.

But a lot of those were offset in the last month, right? And again, that speaks to the fact that there was this sort of rebalancing of excess risk that we saw from risk managers. And the other stuff, you know, you can sort of explain a way in terms of, you know, the U.S. dollar and its move by really a dash towards liquidity. And really what you said is that a lot of central banks in the region, you know, need U.S. dollars for different reasons, whether they have foreign exchange pegs or they're trying to plug revenue streams. And, you know, that actually does, you know, dovetail with another point that I think is a very, very salient, especially when it, you know, when it's, you know, it comes to gold is the fact that, you know, we've gotten a lot of questions about why has gold really not functioned as that haven over the past month? And so, I mean, you know, part of that is tied to the positioning angle that I spoke to earlier, Sewell. The other thing to remember as well

is that, you know, if you have several Gulf countries now that were reliant on oil export revenues, you know, whether it's for their social spending programs in their own economies or to, you know, as a source of U.S. dollars in order to maintain the integrity of their currency pegs, all of a sudden, then, you know, they're losing an important revenue stream given the fact that the straightover moves was basically shut for a month. So what do you do in that scenario? Right. So the thinking is that a lot of them, you know, really did liquidate that their gold holdings. Now, we don't know that. This is obviously, you know, hearsay and we would need to see that confirmed in the data. But a lot of the anecdotal stuff that were hearing and a lot of, you know, a few

the articles that we've seen in the media really do point towards that. Is this the fact that, you know, if they weren't actually doing it, there was a concern that a few of them potentially could be liquidating their foreign exchange reserves or the gold reserves, I should say, non-dollar FX plus gold reserves in order to source those U.S. dollars. You know, it makes sense intuitively, but we'll need to wait to see the data. Although, you know, it has been fairly noticeable in a few other countries, including Turkey. So that's one way to sort of understand the behavior of gold and to contrast with what we're seeing in terms of the other havens.

Does that continue? I mean, we'll have to sort of play this by ear. And it really depends on how long the straightforward moves is closed for and how long these countries will need to plug their revenue streams. We here are of the mind that the traditional relationship between gold and equities, really gold functioning as that haven should. reestablish itself, right? And we're also of the view that if gold gets to a cheap enough level, you know, that you will see potentially other parties jump in and see the value of cold there. Because really over the medium to long term, you know, our own analysis have shown that that it, you know, when it comes to inflation protection, it is the best instrument out there,

far better than some of the other ones that we've seen. Yeah. And I guess you could probably make the same case with some other nuances for, for example, the U.S. 10 year, right? That has gone down in price, risen in yield since the conflict started. I think a lot of people probably would have expected it to stay stable or that demand would kind of flow there. But if you're a country holding those and you need liquidity, it's a pretty easy asset to sell, right? I mean, certainly the flow mechanics wouldn't help in that respect.

And there are central banks out there that are looking towards liquidating their holding of US treasuries in theory that should lead to a rise in yields. But for something like treasuries, one of the reasons why for us, it's difficult to make that jump is that treasures are liquid enough that whatever somebody's selling, there should be somebody on the bid as well. Right. So we don't think the disorderly moves in the long end point to central banks liquidating their treasury holdings on mass. I think if anything, they might slow down the pace that they've been adding them. And certainly we've seen that from the ticks data for a few Asian countries for sure. Okay, no, that's an interesting thing.

I didn't think about it from that angle. And how do you view the current market environment? Because right now, I think it's safe to say and feel free to disagree with me, but I view this as a headline-driven market for the most part. We see a headline and, of course, a headline of Trump tweeting or posting. I don't know what to call it on that. True thing. But we see headlines and then the market ever since the conflict started especially have been really volatile anytime there's a a post from Trump that could potentially impact the conflict.

But what I'm seeing recently is that the market seems to be now calling his bluff a little bit more or saying, you know, the boy that cried wolf kind of wait and see approach. Are viewing that the same way or am I completely off to launch for this? No, I think, you know, you're right. I mean, in the sense that this is very, very much a headline driven trading environment. And it makes it very, very difficult for long-term investors to navigate this period, right? And, you know, the thing is, if we're talking about risks to the broad equity market or to your portfolios over, you know, the medium to long-term, generally that comes from, you know, credit conditions, tightening relative to where they should be, in essence. Now, you know, you can argue that the longer and longer that this energy and commodity shock lasts for, that could metastasize into something like.

credit shock where the economy slows down and then it all of a sudden becomes apparent that central banks are keeping rates at a level. I mean, that would be the traditional conduit to an equity market slowdown. You know, the problem is right now, we're all beholden to what's happening in the Middle East and so much of that is politics driven. And, you know, as much as I can help construct portfolios and as much as I can help with, you know, contextualizing and framing the macroeconomic backdrop, I'm not a very good, you know, source when it comes to understanding what President Trump is thinking what he might do next, right? This is stuff that happens or changes on an hour by hour basis,

even a minute by minute basis. And so it's what I would encourage listeners to do is to understand that, you know, because at this point the acute risks to the, you know, financial condition space still remain relatively limited, albeit, you know, obviously there's the potential for, for issues is still very much there. You know, focus on the underlying fundamentals, focus on the fact that earnings expectations for both the S&P 500 and the TSX have actually increased over the past couple of months. And I'm talking about forward-looking 12-month earnings expectations.

Now, we also do have another round of earnings that are coming up over the next couple of months. You know, I'll be paying attention to what's said in terms of forward expectations, how much margin compression potentially we should expect, given the fact that input costs could rise. And these are the things to me that are going to matter over the medium to long term and really should be the adjudicator for whether or not you want to de-risk or shift allocations within your, within your portfolios. And with respect to the situation in the Middle East, keep an eye on it, obviously.

I mean, but understand also there were always one headline away, as you said, as you mentioned. We always one headline away, but completely agree with you. I'm really looking forward to Q1 earnings and what CEOs have to say because I think we'll get, like you said, a lot of insights on what, how it's impacting their business and some may see some big impact, some might not. Now, I wanted to move on. Obviously, there's been a lot of speaking of headlines, private credit and liquidity constraints when it comes to that. Probably also you can encompass private equity.

Is that something that is concerning from your perspective? Is it just localized to private credit or should we be concerned for the broader market in terms of risk of contagions? I've read countless articles saying, you know, there are quite a few loans that are also given to these private credit entities. that are owned by some of the US banks. I just wanted to have your take because there's been a lot of headlines. I have my views on it, but interest in seeing what you have to say. Yeah. I mean, it's a topical question for sure.

Anytime you see headlines in the media related to private credit, at least over the last little while, they haven't been good. And I think there's a fair degree of PTSD from prior credit related crises. And of course, the one that everyone remembers is 2008. But here's the thing. I mean, you know, yes, it does make sense conceptually, right? Like, you know, the reason why the private credit space has, you know, boomed over the past 10 to 15 years has been effectively because the higher risk lending that banks used to do pre-2008 has migrated over to that side. Right.

But, you know, here's a thing, though, right? Like, who is, you know, who is providing that credit now? It's not banks, right? So banks usually are funded by deposits. And deposits are not that sticky from time. to time. In fact, most of the time, they, whatever risks rise towards banks and things creep into concerns about solvency, you know, depositors can lease. It's still on mass. I mean, we know that from experiences in the 19th and early 20th century before there were actual protections in place.

Just excuse me one minute. I'm just going to take it. Well, we also saw it just, you know, as soon like as recently as 2023, right, when we saw the, we saw the Silicon Valley Bank and a few other US banks, right? They had that liquidity mismatch and they bought treasuries at, you know, at the wrong time, let's just say that. Yeah. And it was, I mean, Credit Suisse, right? I was just thinking about Credit Suisse this morning out of the blue. And I'll never forget that image of when they had that shotgun wedding with UBS and you can see the image of the Greets Suisse CEO sitting next to the UBS CEO, very, very different. But, you know, what I was getting back to earlier is that, you know, the funding for this space has changed from being, you know, flighty depositors that tend not

to be sticky towards long-term investors where there's a fairly substantial degree of capital lockup. And of course, I'm generalizing, right? Because there is an aspect of retail investment when, of course, that is showing up, I think, in the headlines, especially when it comes to, you know, whatever we hear about a particular fund negating any sort of redemptions. But like, you know, there are structural, I mean, that's one of the structural features, I think, limits the risk of contagion here. The fact that funding does come from long-term non-deposage investors. Particularly also, remember that leverage insofar as banks are concerned in the space is fairly constrained, especially for business development companies and the amount that they wore from banks.

Typically, that's usually around, I think, a two-to-one debt-to-equity ratio. That's not nearly as leverage as what we saw banks in the space, going back to pre-2008. I mean, you had some banks that are leveraged close to 30 to 1, right? So naturally, there was going to be a solvency problem. And also to the degree that banks are exposed, and I'm focusing on banks, because obviously, banks affect the broader macro cycle throughout the economy. And, you know, obviously we're going to want to pay attention to that particular load of the financial system. But banks, you know, their exposure to BDCs is protected by covenants over collateralization and a lot of transparency. Believe it or not, even in an opaque space like private credit, banks are going to be very judicious about, you know, what the underlying exposure is.

And I think, you know, that you put that all together. To me, it tells me, at this point, I mean, liquidity stress is manageable, but not destabilizing for the broader economy. The risks, and so far as, you know, exposure are concerned, are at the investor level. And yes, there are risks, right? I mean, this is, you know, we are talking about, you know, a particular type of lending that, again, was classified as higher risk before 2008, when so far as bank balance sheets are concerned. But those are at the investor level. Can this migrate into a macro level credit shock that tightens financial conditions unnecessarily, like we were talking about before?

I don't think that source is going to come from private credit on its own. I think you're going to need other potential sources to watch for. But again, the underlying message that I would send, given the fact that funding for the space has changed materially, the leverage in the space is a lot lower. And banks are fairly protected at this point. name the risks here at the investor level as opposed to the broader macro level. Okay, no, that's a good point. Having cash on hand is essential for any business.

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I've watched and read some pretty smart people that say that's what kind of. kind of scares them right now is just the fact that there's more than just that private credit risk, it's also adding on to what we're seeing in with the straight of foremost. For sure. I mean, there's always, you know, it's always important to take that mosaic approach to anything you do in terms of a macro, right? So if we're talking about credit risks, yes, there are risks to the private credit side that, again, could affect investors as opposed to the broader macro, but then you layer in some

of the other things that we're talking about, including the fact that this situation in the Middle East, potentially could extend for far longer that we thought. You know, could the implementation and adaption of AI displace a lot of workers? That's another risk potentially to take into account. All of these are worth keeping an eye on. But, you know, if we're talking about a systemic crisis in the sense that the availability of credit is severely hampered and curtailed. I mean, at this point, I don't see the clear conduit towards that.

I think a lot of this will, you know, be driven potentially. on the demand side of credit, right? If anything, I mean, if we start to see more and more job losses accumulate in the economy, that, you know, I think at the very least that will matter. And again, you know, that will be the, you know, the outcome, I would say, from, say, lower investor returns, let's say via private credit, let's say higher for longer commodity prices, that affect discretionary spending elsewhere in the economy. And potentially, and of course, I'm speculating your displacement when it comes to employment from the, from implementation of AI. I mean, all those, I think, are risks to the demand side of credit as opposed to the supply.

Okay. No, that's great. I guess one last question because we have to end this in a few minutes. Volatility creates opportunity. Are there any specific sectors, asset class, currently offering some pretty attractive risk-reward investments for investors? I mean, from a risk-reward perspective, it's tricky to say in this environment. I mean, especially if we're talking about equities, it feels like the broadening. out sort of a theme was, you know, appreciated and well understood earlier in this year. And then certainly if we migrate back to that regime, I think, you know, we're still, you know, we still should see that particular strategy play out a little bit more. And so, you know, equal weight strategies.

If we do sort of migrate to that space, I mean, we're still fairly constructive on that as a strategy going forward as opposed to just simply tracking index beta and the like. And of course, you know, that also dovetails nicely with our view that, again, if we look at markets, like the US, things were a bit too concentrated. And it makes sense that, you know, we should see some of that leadership expand beyond a few sectors. Other spaces that we think are, you know, relatively well positioned on a go forward basis. Look, if we're talking about portfolio diversification and we're talking about a period where, you know, inflation could remain a bit higher for longer or least stickier, let's say,

and above central bank targets, to me, I mean, I think commodities are the play, right? I think broad exposure to commodities as opposed to concentrated exposure to commodities make a lot of sense in that environment. I mean, I think, you know, given what we've seen in prior cycles, whenever there's been concerned about, you know, the inflation outlook and the downside risks to growth, I mean, typically that's a fairly well understood environment for commodities and real assets to Apple Forum. So, you know, having exposure to not just metals in the form of gold or even base metals, but also in terms of energy, softs, grains. I mean, there's, that's where I think, you know, that's not as well of an understood space or an allocated to space in Canada. But I do think that that should change on a go-for basis, especially for more and more concerned about upside risk to yields in the fixed income sleeves of portfolios. Okay. No, that's great.

I wanted to finish this with some actionable items here. Well, Bipin, thank you so much for coming on the podcast. You're for people who weren't familiar, managing director, head of VTFs and alternative. strategies for BMO ETFs. It's been great to have you on. I think so much again for your time. And hopefully we'll have you back on the podcast. So maybe later this year, I'm sure there'll be plenty to talk about once again. Oh, my pleasure, Simul. Thank you very much. The Canadian investor podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast.

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