- RBC’s stock-research leaders have put together a portfolio intended to benefit from rising personal spending while protecting investors from uncertainty related to COVID-19.
- A portfolio of the company’s top 30 ideas, updated once a quarter, would have returned 13% this year, roughly double the return of the S&P 500 index.
- Their recommendations have also beaten other global stock indexes over the first three quarters of the year.
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It’s hard to argue with the numbers, even when they’re showing something confusing: Consumer spending is still recovering even as COVID-19 cases are on the rise again.
“Household financial positions remain strong despite the economic downturn, and spending and sentiment continue to show positive trends,” said a group of RBC experts including Head of Global Research Graeme Pearson and Head of US Research Justin Spitzer.
At the moment, that’s still true even though the pandemic is worse than ever in some countries and the US is dealing with the uncertainty brought on by COVID-19 and the presidential election at the same time.
To say the least, that makes for a complicated investing environment. But RBC’s stock pickers can boast of a strong track record so far. They’ve pulled together 30 “top global ideas” stocks that are updated at the end of each quarter. As of the end of the third quarter, those picks had generated a return of 13%, double the return of the S&P 500 index.
The return on their picks looks even better compared to other indexes like the S&P/TSX Composite Index, Euro Stoxx 600, or MSCI Daily Total Return index. The top global ideas stocks have equaled or beaten those benchmarks every quarter so far this year.
Pearson, Spitzer, and their team are highlighting a diverse group of stocks that are exposed to growth in consumer spending and an increase in economic activity, but without overloading on tech stocks or post-pandemic “winners.”
“Changes this quarter reflect a rotation out of companies that have seen strong performance and less upside, into names that have a more attractive upside opportunity as the recovery progresses,” they wrote.
The following stocks comprise the updated top global ideas list. They are all rated “Overweight” by RBC’s analysts, and they’re ranked from lowest to highest based on how much they would have to rise to reach the analysts’ price targets.
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