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Royal Bank of Canada (RY)
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Toronto-Dominion Bank (The) (TD)
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Bank of Nova Scotia (The) (BNS)
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Bank of Montreal (BMO)
Q: We have well-diversified Canadian portfolio (~30 holdings) focused slightly toward growth. Across our various accounts we are overweight in the Financial Services sector. We are considering reducing our holdings in the traditional banks, which are currently roughly equal amounts of TD, BNS, BMO and RY.
Putting aside potential taxation issues, given the choice between reducing all the banks by roughly the same amount or reducing the number of banks to 2 or 3, which would you prefer and why? If it's the latter, which banks would you keep and in what order?
Thanks,
Peter.
Putting aside potential taxation issues, given the choice between reducing all the banks by roughly the same amount or reducing the number of banks to 2 or 3, which would you prefer and why? If it's the latter, which banks would you keep and in what order?
Thanks,
Peter.
5i Research Answer:
Picking a winning bank can be difficult. Historically, it has often been that the worst-performing bank becomes the best-performing in the next cycle. But this trend has been broken recently, though it has a good history. Thus, we would side with an across-the-board trim.