Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

Infrastructure: An alternative solution for inflationary times

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By Shane Hurst

Managing Director, Portfolio Manager,

ClearBridge Investments, part of Franklin Templeton

(Sponsor Content)

Inflation has been the major theme dominating the investment world in 2022. Canada’s annual inflation rate reached 6.8% in April, representing a 31-year high. Canada is far from an outlier in this respect, with the U.S., the U.K. and many other western nations also experiencing rapid price growth over the past 12 months. In response, central banks have committed to a series of rate hikes this year, which in turn has raised the prospect of a global recession.

In this uncertain environment, market volatility has been elevated, particularly so in bond markets. Downside protection is front of mind for many investors as a result, but there are options out there to still generate returns for a portfolio without loading on risk.

Infrastructure assets, once the preserve of institutional investors, can now be a useful tool for retail investors and help in limiting risk and providing a stable income stream. Launched in Canada last year, Franklin ClearBridge Sustainable Global Infrastructure Income Fund (available as an ETF through FCII), harnesses the expertise of ClearBridge Investments, one of Franklin Templeton’s specialist investment managers. ClearBridge manages infrastructure income funds in the U.S., U.K., Australia, Europe and Canada, with global AUM of US$4 billion, as of March 31, 2022.

An asset class that makes economies function

Infrastructure as an asset class can be loosely defined as the services and facilities necessary for an economy to function. With the ClearBridge Infrastructure strategy, the portfolio is made up of regulated assets (e.g. electricity infrastructure and sewage pipes) which are characterized by stable cashflows, high income and low GDP exposure, and user-pay assets (e.g. airports, ports, railroads and toll roads) which generally provide lower income but are leveraged to GDP.

The investment team can take on a more defensive posture as circumstances dictate. For example, prior to the extreme sell-off of 2020, the strategy had a higher weighting to lower-risk regulated assets, which served it well during that period when its decline was approximately half that of its benchmark S&P Global Infrastructure Index. Continue Reading…

MoneySense ETF All-Stars 2022

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MoneySense has just published its annual feature, the ETF All-Stars 2022. For the first time in several years, I was not the lead writer on this package although I was involved in my role as Investing Editor at Large. We passed the writing reins to veteran financial freelance writer Bryan Borzykowski, who has previously written MoneySense’s annual Robo-advisor feature and is currently writing a new book to be titled ETFs for Canadians for Dummies.

As I point out in another MoneySense column, there is another ETF book published in 2021 that makes a good complement to the All-Stars package.  Reboot Your Portfolio is written by Dan Bortolotti of PWL Capital. Dan was the lead writer of the first edition of the ETF All-stars and served as a panelist for several subsequent years, along with his PWL colleague Justin Bender. In recent years, PWL advisors Ben Felix and Cameron Passmore have served as some of the panelists responsible for selecting the All-stars. The team of 8 panelists is unchanged from last year.

You can find the new edition of the All-stars by clicking here: Best ETFs in Canada for 2022.

As Bryan points out in his overview, by design, the panel didn’t make that many changes from previous years. The idea all along has been to provide a bunch of core low-cost, broadly diversified ETFs that don’t need to be changed every year. Certainly, the panel has never felt obliged to recommend brand new “theme” ETFs just for the sake of change.

Here’s my summary of the main changes:

Canadian Equities

No changes to last year’s lineup.

US Equities

The panel dropped the list of US equity ETFs from ten last year to seven this year.

International Equities

Last year’s picks return, plus the panel added three Emerging Markets ETFs: XEC, ZEM and EMXC.

Fixed Income

While Fixed Income has been a languishing asset class in recent months, the panel didn’t view this as alarming. Its previous lineup of Bond ETFs returns largely intact, with just one casualty: the panel decided to remove the Vanguard Global Bond ETF (VGAB.) For those who are nervous about more losses from rising interest rates, it continues to emphasize short-term bond ETFs like VSB and XSB

Note that in my recent MoneySense Retired Money column on the alleged Death of Bonds, I quote panelist Ben Felix, who still sees a role for fixed income in diversified portfolios. My column suggests those worried by rising rates can either park in treasury bills and wait for further interest rate hikes later this year, or ladder 1- and 2-year GICs every few months. Several 1-year GICs now pay close to 3%. That may be below the rate of inflation of late but at least  its beats losses of near 10% sustained by aggregate bond ETFs. Continue Reading…

The Ukraine war: a portfolio review

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By Duane Ledgister, vice president, CC&L

(Special to the Financial Independence Hub)

The daily escalation of the war in Ukraine is tragic, and the range of potential outcomes is unsettling. We are seeing a devastating humanitarian crisis and the human toll is immeasurable. Below we speak to some questions we have received and provide insights into how to best manage a portfolio.

Emerging market risks

Russia is one of a group of countries investors call ‘emerging markets,’ which reflects the stage of maturity and development of their economies and financial systems. Collectively, companies in emerging markets are an attractive source of growth for investors, despite their heightened risks. Stock markets in the developed world have comparatively low return expectations resulting from developed markets’ lower economic growth and higher valuations. At CC&L, our emerging markets strategy had a 2% weight to Russian stocks coming into the crisis. When considering this in the context of clients’ overall portfolios, this equates to less than one-tenth of one percent. Client portfolios have no exposure to companies in Ukraine.

What impact has the war had on portfolios?

While direct exposure to Russian and Ukrainian assets may be minimal, portfolios have not been immune to the volatility of the recent weeks caused by the war. Russia and Ukraine are important countries in the supply of commodities. Russia supplied approximately 12% of world oil and about 38% of Europe’s natural gas until the start of the war. Additionally, Russia and Ukraine — known as the breadbasket of Europe — provided roughly 25% of the world’s grain. Since the war began, commodity prices, particularly oil and gas, have shot up, acting like a tax on the global economy. This will put downward pressure on economic growth in many regions.

Context is key

It is important to understand the global economic landscape that was in place before the onset of aggression. The world was experiencing inflation levels not seen in decades, exacerbated by commodity underinvestment and global supply disruptions caused by the COVID-19 pandemic. Economic growth was riding high, boosted by the massive fiscal stimulus to offset COVID-19-related demand weakness. Continue Reading…

12 questions to ask when buying a Used Car

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What is one question to ask when buying a used car?

To help you buy a used car, we asked business leaders and sales professionals this question for their best insights. From “What Are Your Used Car Financing Options?” to “How Many Previous Owners?”, there are several questions you should ask to get the best deal out of buying a used car.


Here are 12 questions to ask when buying a used car: 

  • What Are Your Used Car Financing Options?
  • Do the Heat and Air Conditioning Work?
  • Can I See the Carfax?
  • What is this Used Vehicle’s Service History?
  • Will the Car Need a Fluid Change Soon?
  • Clean Or Salvage Title? Don’t Buy Someone Else’s Lemon
  • Can I Inspect and Test Drive the Car?
  • Can it Drive Coast-to-Coast Tomorrow?
  • What’s the Mileage?
  • How Are the Safety Features?
  • Why Are You Selling the Car?
  • How Many Previous Owners?

What are your Used Car Financing Options?

The focus with vehicle and equipment financing is almost always on new, but used car buyers also have many options. You should never be afraid to ask about used car financing options. Your dealer wants to make the sale, and will do whatever they can to get it. Ask them to explain your options, and what they think is best for you and your situation. This would help to build a relationship with your dealer, especially if you go a month or two in advance of making the actual purchase. While getting financing options from your dealer is great, it’s even better to find a lender or lending institution in advance to get financing options with them first to have an amount that you can negotiate for as good a deal as possible. — Carey Wilbur, Charter Capital

Do the Heat and Air Conditioning Work?

One mistake people make is to check the temperature control based on the season in which they’re buying the car. If buying the car in the summer, they’ll check the air conditioning or they’ll check the heat if making the purchase during the winter. Make sure to ask about, and check, both. Otherwise, when the seasons change in a few months you may be surprised and disappointed. — Logan Mallory, Motivosity

Can I see the Carfax?

As nice as it would be to take people at their word that the vehicle you’re looking at hasn’t been in an accident and has been regularly serviced, you really can’t trust anyone today. Especially in a redhot used car market like we’ve been seeing. So one of the first things you need to ask is: can I see the Carfax? The Carfax is a simple vehicle history report that will show when the car has been serviced, if it’s been smogged, and most importantly, if it’s been involved in any accidents. And this isn’t an unreasonable ask. Carfax reports are cheap to obtain and almost a standard report in the used car world today. I personally wouldn’t buy any used car without confirmation that it’s got a clean title and history report. — John Ross, Test Prep Insight

What is this Used Vehicle’s Service History?

Always ask for the service history of a used car. To best understand how the vehicle may function or disfunction after purchase, you need to collect a copy of the car’s service history detailing its breakdowns, issues, and part history.

The last thing you want post-purchase is breaking down on your drive home. Many different car manufacturers are notorious for having issues specific to their brand or in particular models they carry.

Check the service history to ensure the car you buy doesn’t have defects common to that model prior to purchase. You don’t want to buy a used car to find out it has serious electrical problems, or whatever else. — Zach Goldstein, Public Rec

Will the Car need a Fluid Change soon?

How close is the car to 50k, 75k, or 100k miles? Many cars require fluid changes at these key milestones, and your used car is close, this can often add a few hundred dollars to your purchase price even if the car isn’t in need of any repairs. It’s important to factor in all additional expenses when purchasing a used car–and upcoming, expected maintenance fees should be included in your assessment of the car’s total cost. — Rob Bartlett, WTFast

Clean or Salvage Title? Don’t buy someone else’s Lemon

Ensure the used vehicle has a clean title. Having a rebuilt or salvage title impacts the value and sales price, as well as additional steps potentially needed in some states such as regular vehicle inspections.

Insurance companies may also have different guidelines to cover salvage titles, so it’s important to understand the vehicle’s history and title status before finalizing the sale. While there are benefits to purchasing a used vehicle, looking into the title status can help you avoid costly or surprise expenses later. — Russell Lieberman, Altan Insights

Can I Inspect and Test Drive the Car?

One great question that everyone should ask when buying a used car from any dealership or person is, “can I inspect and test drive the car?” You can usually tell how, “used”, a car is from first glance of the exterior and interior. However, some used cars will look almost brand new and won’t have a scratch, dent, electrical, or cosmetic issue but the seller may be lying about, or is unaware of, an issue with the car that may get worse in the near future. You should always be cautious and ask the seller if you can properly inspect it and drive it around a bit first to see if there are any problems with the engine, steering, brakes, and other important, and expensive, aspects of the vehicle before you even consider buying it. — Bill Lyons, Griffin Funding Continue Reading…

How to avoid NFT scams and fraud 

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By Akanksha Malik

Special to the Findependence Hub

Non-fungible tokens (NFTs) stepped into the limelight in 2021. As more people began putting their money into them, NFTs became part of our everyday vocabulary. NFT investments gained worldwide popularity to reach a market value of over US$40 billion. But like most financial assets, this new cryptographic asset also presents lucrative opportunities for scammers.

In this article, we’ll dive into the five most common NFT scams and how you can avoid NFT fraud.

1. Phishing scams

You need to sign up for a digital wallet to transact on the Ethereum blockchain. The most popular Ethereum wallet for NFT collectors is MetaMask, which was recently targeted in a phishing scam. The NFT scam involves fake advertisements asking users for their wallet keys or their security seed phrases. These fake pop-ups operate on social channels such as Telegram, Discord, and other forums redirecting users to a landing page that looks like MetaMask or other popular websites. A successful phishing attempt can wipe out all the cryptocurrency in your digital wallet.

How to avoid

  • Write your seed phrase down on paper. Don’t store a photo of it on your phone, and never give it to anyone. 
  • Always visit the verified website directly for all your crypto transactions – not through links, pop-ups, or emails.
  • Never enter information into the MetaMask pop-up or any other pop-ups.

2. Pump and Dump NFT scams

Pump-and-dump schemes arise when a group of people buys a bunch of NFTs or currency to drive their demand up artificially. After successfully raising its worth, these experienced scammers cash out by selling their NFTs to the highest bidder.

How to avoid

  • Monitor, track or follow the project on Twitter and join its Discord channel to see if it has a good number of engaged collectors and investors.
  • Review the wallet records and transaction history of the desired NFT. If there are several transactions around one date, it can be a red flag.

 3. Catfishing 

Since NFTs are virtual investments, their marketing happens on social media, making them vulnerable to catfishing. Moreover, popular NFT communities hire social media influencers and celebrities to promote NFTs; this makes it difficult to tell the real NFTs from the fake ones.

How to avoid Continue Reading…