The Globe and Mail reports in its Friday, May 12, edition that Canada's benchmark equity
index can thank just five
companies for 57 per cent of its
gains this year. A Bloomberg dispatch to The Globe reports that while finance, energy and
materials account for two-thirds
of the S&P/TSX composite
index, three of the top five
gainers are currently outside
these sectors: Canadian National
Railway, Restaurant Brands
International and Rogers
Communications.
The other two are usual suspects
Brookfield Asset Management
and Royal Bank of
Canada.
Removing these five contributors
would reduce the
index's gain by 1.3 percentage
points this year, leaving it with a
1-per-cent advance, which would
be among the smallest
of more than 100 global peers
tracked by Bloomberg.
By comparison, the top five
in 2016 consisted of three
banks and two energy companies.
BMO analyst Brian Belski says, "Concentrated outperformance
by a few stocks is not an anomaly." He recommends investment beyond the traditional
sectors.
He says, "This type of strategy significantly
outperforms during trading-range environments in
commodities, which we think
we're in."
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