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Canadian Money Managers Favor Value Investing Amid Economic Uncertainty

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  Published in Stocks and Investing on Monday, March 16th 2026 at 8:07 GMT by The Globe and Mail
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Toronto, ON - March 16th, 2026 - As global economic uncertainties persist - encompassing stubbornly high interest rates, escalating geopolitical tensions, and unpredictable inflation - Canadian money managers are charting a course defined by cautious optimism and a steadfast commitment to fundamental analysis. The prevailing sentiment isn't one of panic, but rather a resolute focus on long-term value, rejecting the temptation to make fear-driven investment decisions.

Market volatility has become a constant companion for investors, but experienced Canadian portfolio managers are increasingly vocal in their belief that succumbing to fear is a detrimental strategy. "Fear is often the biggest enemy of investors," emphasizes Steve Saxon, Chief Investment Officer (CIO) of Jarislowitz Investments. "People make emotional decisions when markets decline, and those decisions are often the worst ones." Saxon's firm, like many others, is doubling down on identifying companies possessing durable competitive advantages and a consistent track record of profitability - businesses built to withstand economic headwinds.

This approach is rooted in a value-oriented philosophy that prioritizes intrinsic worth over short-term market fluctuations. Jim Mawer, founder and senior portfolio manager at Mawer Investment, encapsulates this strategy succinctly: "We don't try to predict the future. We look for companies that are trading below their intrinsic value, and we buy them." While seemingly straightforward, this requires significant patience and discipline, traits increasingly vital in the current market environment.

"It's not easy to ignore the noise," Mawer concedes, acknowledging the psychological challenges of remaining steadfast amidst market turmoil. "But you have to remember that the market is often irrational in the short term." This acceptance of market irrationality is a hallmark of successful long-term investing, allowing managers to capitalize on temporary mispricings and avoid being swept up in speculative bubbles.

The rise of passive investing, particularly through index funds, has provided investors with low-cost access to broad market exposure. However, a key differentiator for many Canadian money managers lies in their embrace of active management. Unlike passive strategies that simply mirror a benchmark, active managers proactively make strategic decisions regarding stock selection, aiming to outperform the market through insightful analysis and skillful portfolio construction.

Susan Somers, head of Canadian equities at TD Asset Management, highlights the willingness of active managers to deviate from the herd. "We're not afraid to take unpopular positions," she states. "We're willing to go against the crowd if we believe it's the right thing to do." This contrarian approach, while potentially leading to short-term underperformance, can unlock significant value for investors who are aligned with a long-term investment horizon.

The emphasis on fundamentals extends beyond simply identifying undervalued companies. Managers are also increasingly scrutinizing factors such as supply chain resilience, environmental, social, and governance (ESG) considerations, and the long-term sustainability of business models. These elements are seen as crucial indicators of a company's ability to navigate future challenges and generate consistent returns. The increased focus on ESG isn't just a matter of ethical investing; it's increasingly recognized as a driver of long-term financial performance.

Furthermore, diversification remains a cornerstone of risk management. While Canadian equity markets have historically been dominated by a handful of sectors - notably financials and energy - managers are broadening their exposure to include growth sectors like technology and healthcare, as well as international markets, to reduce concentration risk.

Despite the persistent headwinds, a cautious optimism permeates the Canadian money management landscape. Managers believe the Canadian economy, while not immune to global challenges, possesses inherent resilience and the potential for continued growth. They anticipate that the stock market, over the long run, will continue to deliver positive returns, albeit with periods of volatility. The key, they argue, is to remain grounded in fundamental principles, avoid impulsive reactions, and embrace a long-term perspective. The Canadian financial sector's robust regulatory framework is also seen as a stabilizing influence in a world of increasing uncertainty.