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1. [pdf] Investment Direction - Pivotal Select
2. August 2019 Advisor eNews

   Coming soon:

   Tech updates for plan members

   Technology doesn’t stand still, and neither does your clients' businesses. That’s why we continually invest in technology to make things easier for your clients and their employees.

   Faster claims processing on Equitable EZClaim^® Mobile

   Equitable Life now provides real-time processing of massage therapy, physiotherapy and chiropractor claims submitted via the EZClaim Mobile app.

   That means plan members are able to find out the status of their claim almost instantaneously. And, for approved claims, they will receive payment even sooner - often in as little as 24 hours.

   In order to allow for instantaneous processing and faster payment, plan members will be prompted to enter some additional information including the practitioner’s name, the date of the expense, and the type and amount of the expense, when submitting their claims for these services.

   Equitable Life plan members can submit all types of health and dental claims via EZClaim Mobile, including co-ordination of benefits and Health Care Spending Account claims. Currently, 43% of all claims are submitted through the user-friendly app.

   AS part of our ongoing efforts to improve the mobile claims experience for plan members, we've also added biometric login functionality to allow plan members to sign in to the app using their face or fingerprint. And we've redesigned our landing page on the mobile app to make it easier for plan members to navigate the various features of the app.

   We will be announcing this enhancement to plan members on EquitableHealth.ca

   Introducing InpatProtect:

   Health coverage for employees who are new to Canada

   For a new employee starting to work in Canada, looking after basic health needs can be difficult.

   There’s a waiting period for provincial health coverage, and group benefits plans don’t cover the physician, hospital or emergency services that they or their eligible dependents may need during their initial months in the country. They could end up incurring significant unexpected health expenses.

   That’s why Equitable Life has launched InpatProtect^TM. InpatProtect provides temporary coverage to look after the basic health needs of employees and their eligible dependents during their transition to Canada. Your clients can recruit from outside the country knowing that their employees will have some protection in the event of a medical need, including an emergency.

   For up to 90 days, InpatProtect will cover employees and their eligible dependents for basic services that would normally be reimbursed under provincial health plans, such as:

   • Physician services
     • Prescriptions for medications
     • Diagnosis and treatment for illness or injury
   • Hospital services
     • In-patient services
     • Drugs prescribed and delivered as an inpatient in-hospital
     • Out-patient services
   • Emergency services
     • Ambulance services
   • Emergency dental services

   Contact your Group Marketing Manager or myFlex Sales Manager for more information about this new product from Equitable Life.

   De-listed service providers

   As part of our ongoing initiative to have Group Benefits plans only reimburse eligible claims, we conduct reviews of the billing and administrative practices of service providers, including clinics, facilities and medical suppliers.

   As a result of these reviews we may de-list certain providers.  We will no longer accept, or process claims for services and/or supplies obtained from those providers. The plan member can still choose to obtain services or supplies from these providers, but Equitable Life will not provide reimbursement for the claims.

   Review Equitable Life’s de-listed service providers

   The delisted service provider list is also posted on EquitableHealth.ca for plan members to review to determine if their claim(s) are eligible for reimbursement under their Group Benefits plan.

   For more information about protecting group benefits plans from abuse, check out our articles.

    

    

   ¹ Based on Equitable Life health and dental claims submitted between January 2019 – March 2019
   
   Google Home and Google Assistant are registered trademarks of Google LLC.
   ^® denotes a trademark of The Equitable Life Insurance Company of Canada unless otherwise indicated.

3. Short-term disability coverage for plan members in quarantine or self-isolation*

   Please note: This announcement applies only to groups with short-term disability coverage through Equitable Life

   With the spread of COVID-19, many people have been instructed to self-isolate or quarantine themselves or are doing so voluntarily. We realize this is a stressful situation for people and they may be wondering if they are eligible for disability benefits. Short-term disability is designed to replace a plan member’s earnings if they are unable to work due to illness and injury.  As a result, only plan members who meet the following criteria are eligible for benefits:

   • Plan members who have tested positive for COVID-19 and are unable to work from home are eligible for coverage from Day 1 of their self-isolation period.
   • Plan members who have not been tested but have symptoms consistent with COVID-19 and are unable to work from home, are eligible for coverage. Claims will be assessed according to the terms of the plan.

   Plan members who are in quarantine for any other reason, but do not have symptoms consistent with COVID-19, are not eligible for coverage. These plan members should consider applying for Employment Insurance (EI) benefits, if they do not have an option to work from home.

   Submitting COVID-19-related STD claims

   To make things easier for plan members who need to submit claims related to COVID-19, we will not require a physician’s statement. Instead plan members should submit our simplified Short Term Disability Plan Member COVID-19 Claim Form.

   Plan Administrators need to complete their portion of the regular Short Term Disability Form (Form #421).

   This is a temporary process that will remain in effect through the current coronavirus situation. We will update on changes and share them on EquitableHealth.ca.

   Applying for the Employment Insurance sickness benefit

   Canadians quarantined due to COVID-19, who are not receiving Short Term Disability benefits, can apply for Employment Insurance (EI) sickness benefits. The one-week waiting period for EI sickness benefits has been waived. Service Canada’s dedicated toll-free support number is 1-833-381-2725 or (TTY) 1-800-529-3742.

   *Indicates content that will be shared with your clients

4. IMPORTANT NOTICE: FUNDS WITH DEFERRED SALES CHARGE OPTIONS

   The Canadian Council of Insurance Regulators require all insurance companies to discontinue the sale of segregated funds with Deferred Sales Charge (DSC) effective June 1, 2023*.  

   PIVOTAL SELECT™ SEGREGATED FUND PRODUCTS 

   On May 29, 2023, funds with a DSC or Low Load (LL) sales charge option will be allocated to the No Load (NL) sales charge option of the funds available within the policy. 

   • Any existing amounts held in DSC or LL funds will retain the existing DSC schedule, outlined in the client’s contract. The annual 10% available (20% for RIF policies) for withdrawal without fees continues to apply through to the expiry of the fee schedule. 
   • If the default deposit instructions and/or pre-authorized scheduled deposits the client previously provided include funds with DSC or LL, these instructions will automatically update to NL of the same fund for all future deposits. 

   In alignment with Equitable's current administrative rules, if the client has DSC or LL funds, the client will not be able to deposit No Load Chargeback funds (NL-CB and NL-CB5) within the same policy. 
   
   For more information, please click here.

   LEGACY SEGREGATED FUND PRODUCTS 

   Ongoing deposits to DSC funds continue when a segregated fund product does not have an alternative sales charge option available within the contract. This applies to the following products: 

   • Personal Investment Portfolio 
   • Pivotal Solutions II 
   • Pivotal Solutions DSC 

   Clients may continue to make new deposits to the DSC funds within the policy. Any new segregated fund deposits, as well as any existing segregated fund amounts within the policy, will retain the DSC schedule outlined in the contract. 
   
   For more information, please click here.
   
   Equitable's Advisor Services Team is available Monday to Friday, 8:30 a.m. – 7:30 p.m. ET at 1.866.884.7427 or by email at savingsretirement@equitable.ca. You can also contact your Regional Investment Sales Manager. 
    

   *Draft regulation in Quebec is currently under review which may affect Equitable Life’s approach for clients in the Province of Quebec with legacy segregated fund products. We will continue to monitor provincial regulatory developments. 

   ™ or ® denote registered trademarks of The Equitable Life Insurance Company of Canada. 

   Date posted: May 4, 2023
    

5. GIA Coming to the Equitable FHSA Many clients have already taken advantage of Equitable’s First Home Savings Account (FHSA), available on Pivotal Select™ Investment Class (75/75) and Pivotal Select Estate Class (75/100).
    
   And now, we’ve got some more great news. We’re working to expand the Equitable® FHSA to include our Guaranteed Interest Account (GIA). But clients don’t need to wait to start earning tax-free income in a FHSA.
    
   If clients want to open a FHSA now but may be interested in an Equitable GIA,  simply choose the No-Load Equitable Money Market Fund Select investment option while we work on including the GIA on FHSA. The current yield to maturity is 5.41% gross.¹
    
   We will let you know when the GIA is available in FHSA in the coming months. Once it is available, advisors can speak to clients about the GIA options available in the FHSA and select what best suits their needs.
   
   Don’t forget, clients who make a contribution to their FHSA, RRSP or TFSA between January 1 and February 29, 2024, could win $5,000 and you could win $1,000 in Equitable’s New Year’s Resolution, New Year’s Contribution Contest.²
    
   For more information, please contact your Regional Investment Sales Manager.
    
   1 As of January 16, 2024, 4.06% net after deducting the management expense ratio. Yield to Maturity: the market value weighted-average yield to maturity includes the coupon payments and any capital gain or loss that the investor will realize by holding the bonds to maturity.
    
   2 Equitable’s New Year’s Resolution, New Year’s Contribution Contest: No purchase necessary. Contest period January 1, 2024, to February 29, 2024.  Enter by making a deposit to an Equitable FHSA, TFSA or RRSP during the contest period or by submitting a no-purchase entry. One prize for a total value of $5,000 CAD to be drawn on March 8, 2024, will be awarded. The servicing advisor for the policy to which the selected entrant made the deposit is also an eligible winner and will receive a $1,000 CAD prize. For example, if an Equitable client is a winner of the $5,000 prize, the client’s servicing advisor wins a $1,000 prize.  Open to legal residents of Canada of the age of majority. Odds of winning depend on number of eligible Entries received during the Contest Period.  For full contest rules, including no-purchase method of entry, see the full contest rules.

   Posted January 17, 2024

6. Banking Changes
7. NEW MARKETING MATERIAL! Flexibility for supplemental income with Equimax Equitable has created a new piece to help you understand our new Equimax^® illustration feature, Paid-Up Additions (PUA) to Cash Dividends, now available!
   
   Did you know Equimax clients can switch from the PUA dividend option to the cash dividend option by simply requesting a dividend option change?^1,2
   
   You can illustrate this for paid-up 10 pay and 20 pay Equimax plans! Show clients how they can build in added flexibility and use their policy to create a source of future supplemental income by simply changing the dividend option to cash.³
    
   Illustration Considerations:
   ● Works with Equimax Estate Builder^® or Equimax Wealth Accumulator^®.
   ● Illustrate the Excelerator Deposit Option (EDO) to help build the policy values while the PUA dividend option is in effect. EDO payments can’t be made once the policy is switched to the cash dividend option.
   ● If a client needs temporary insurance coverage – like mortgage protection - illustrate term riders for how long they are needed to meet the specific goal.³
   ● If critical illness coverage is needed our competitively priced 20 pay critical illness riders are a great fit to provide paid-up critical illness coverage.³ 
   
   Clients should apply for the coverage they need. This concept is about flexibility to create a future source of supplemental income.
   
   Want to learn more? Check out our new marketing piece: Flexibility for supplemental income with Equimax (2077).
   
   For more information, reach out to your local wholesaler.
    
    
   ^® and ^TM denote trademarks of The Equitable Life Insurance Company of Canada.
   ¹ Dividends are not guaranteed and are paid at the sole discretion of the Board of Directors.  Dividends may be subject to taxation. Dividends will vary based on the actual investment returns in the participating account as well as mortality, expenses, lapse, claims experience, taxes, and other experience of the participating block of policies.
   ² To request a change to the dividend option complete and submit form 558 (Request for Withdrawal of Dividends, Change in Option, or Premium Offset). A client can request a change to the cash dividend option from any other dividend option regardless of the premium type or whether premiums continue to be payable, subject to our current administration rules and guidelines. Some dividend option changes are subject to underwriting. Underwriting is not required to change from the PUA to cash dividend option, however, underwriting is required to change from the cash dividend option to the PUA dividend option.
   ³ This concept is intended to illustrate a one-time switch to cash dividends once premiums are no longer payable for the policy (including premiums for riders). Premiums are paid with after-tax dollars and dividends paid in cash are subject to taxation.  If premiums are payable there will be tax savings for the client to use the before-tax cash dividend to reduce the premium instead of taking it entirely as a cash payment.  This concept is intended for longer term planning, not to meet short term cash needs by switching back and forth between the PUA and cash options. Clients should consider a policy loan or a cash withdrawal to meet short-term cash needs; policy loans and cash withdrawals may be subject to taxation.
    
8. EAMG Market Commentary July 2023

   
   July 17, 2023
   
   Rates & Credit - The rates market was volatile in Q2 as investors focused on inflation, central bank interest rate decisions, and recession probabilities. Persistent strength in U.S. consumer spending and labour markets have surprised investors and prompted further interest rate tightening from central banks. In Canada, corporate bonds outperformed government bonds and the broader FTSE Canada Universe Index during the quarter, with a total return of 0.2%, versus a loss of 1.0% for government bonds and 0.7% for the overall Index. The corporate bond outperformance was driven by a broad risk-on tone to the market, most notably in April as the market recovered from the banking sector liquidity crisis that developed during March. That said, the market tone remained cautious, with the improved risk premium on corporate bonds tempered by lingering concerns around sticky inflation, high interest rates, and the potential for slower economic growth into the latter half of the year.
   
   Dominance of U.S. Equities – U.S. equity markets posted another strong quarter with the S&P 500 returning 8.7%, outperforming Canada and other major international equity markets. The S&P/TSX Composite, returned 1.2% in CAD. Major developed economies from Europe, Australasia, and Far East (EAFE) returned 3.2% in local currency terms. The highly anticipated re-opening of the Chinese economy has failed to materialize with economic data indicating less strength than previously forecasted. Amid sluggish Chinese growth, closely interconnected economic partners such as the European Union, as well as commodity-driven markets like Canada, have all underperformed the U.S. on a relative basis.
   
   U.S. Fundamentals – Earnings continued to contract versus prior year, albeit at a slower pace than forecasted. Forward earnings guidance improved quarter-over-quarter with corporate sentiment returning to neutral levels. Based on our analysis, we observed that 31% of major companies expect deteriorating financial performance, while 33% expect improved performance, with the remaining expecting no material change. Overall, major U.S. companies remain well capitalized with strong operating margins. However, company guidance indicates a prioritization of cost controls amid increased consumer indebtedness and concerns about the health of the consumer.
   
   Artificial Intelligence (AI) Mania – Despite concerns that the U.S. economy is at a late stage in its economic cycle, that monetary tightening by central banks could go too far, and the fact that earnings contracted on a year-over-year basis, equity markets became more expensive during the quarter with price-to-earnings multiples expanding. This expansion was driven by investors crowding into AI focused technology companies, with the seven largest AI/technology themed companies averaging a 26% return while the other 493 members gained only 3%. Investors rewarded businesses with contributions to AI development (hardware and software components), as well as those with the ability to implement synergies from leveraging the technology. A crowded market surge is not uncommon at this point in the economic cycle, where positive economic surprises, in this instance, strong employment and consumer spending can lead to an upswelling in investor confidence.
   
   U.S. Quant Factors – Using our investment framework, we currently favour exposures to large cash-rich companies with innovative product offerings, which we believe offer the strongest risk-adjusted returns in the current market environment. While the valuation of AI companies seems to defy traditional rationales, the momentum has continued to push the group higher. Consequently, the Quality factor (companies with higher return-on-equity, strong operating performance, and healthy leverage levels) participated in the AI trend and consistently outperformed throughout the quarter. The Low Volatility factor (stocks with lower sensitivity to broad market movement, and lower price volatility) underperformed through the quarter. While the Low Volatility factor typically performs well at this stage of the economic cycle, the fact that a small number of stocks were responsible for much of the market’s return hurt this factor. Lastly, the Momentum factor (stocks with a recent history of price appreciation) initially underperformed during the quarter before rebounding in June. This factor’s recent outperformance suggests that the market is becoming complacent and possibly signals that rotations within the market are slowing as current trends remain in favour.
   
   Canadian Fundamentals – Top line revenue missed forecasts while bottom line earnings were consistent with expectations. Softer-than-expected results out of Canadian financials, as well as underwhelming results from the materials sector, dragged on the aggregate index performance. Earnings forecasts for the rest of the year have been revised downward with analyst expecting index aggregate earnings to detract 2% to 3%. Meanwhile, the Bank of Canada raised its overnight interest rate by 25 basis points, bringing it to 4.75% on the backdrop of robust economic data releases including Q1 GDP and April CPI.
   
   Canadian Quant Factors – The most notable dislocation in Canada was the convergence of the dividend yield of High-Dividend ETFs and Equal-Weight Bank ETFs. We believe that the drag from Canadian banks following the U.S. regional banking concerns in March resulted in a discount of the Quality factor as the performance of the group is sensitive to the movements of banks. While banks did recover around 35% of their SVB-induced underperformance, the nature of banking has attracted investor scrutiny given the view that we are in the late-stage of the economic cycle. That said, this environment is an attractive environment to add variants of the Quality factor, which would gain exposure to a rebounding industry that offers a similar dividend yield to the high dividend stocks.
   
   Views From the Frontline
   
   Rates – On an outright basis, bond yields across the curve continue to look attractive. Economic data remains strong however we are beginning to see the first signs of weakness in spending, jobs and inflation. Slower growth, a more balanced labour market, declining inflation, and tighter credit conditions will likely drive interest rates lower throughout 2023. Market participants remain focused on the extent of interest rate hikes and the duration of a pause required to bring inflation back to the 2% target. With inflation remaining more persistent than previously expected forecasts around the timing, pace and extent of the removal of monetary policy have been pushed into 2024.
   
   Credit – The uncertain economic outlook and risks around slower economic growth later this year merit caution about corporate bonds and a bias towards higher-quality, shorter-dated credit where we think the risk / reward dynamic are more favourable. That said, the “soft-landing” narrative, now more pervasive in the market, could continue to provide support to risk assets, which we view as an opportunity to further pare down higher beta exposure.
   
   Equities – Given the direction of the current economic and company fundamental data, we continue to favour high quality growth segments of the market with strong operating margins. As such, the late cycle conditions in the market reinforce our preference for large cap stocks over smaller, more U.S. domestically focused businesses. The U.S. Low Volatility factor’s underperformance is unlikely to reverse in the short term given the resilience of the U.S. economy. Furthermore, after a steep decline last quarter, we expect that cyclical value will find support in the near term, echoing the increased chance of slowing inflation without stalling economic growth. In Canada, equities are typically more cyclical in nature, which coupled with the potential for an earnings contraction, makes us view the Low Volatility factor as more likely to outperform. Like the U.S., we prefer Canadian high-quality companies to navigate through the late cycle environment. On the heels of poor Chinese economic data and underwhelming stimulus, we are maintaining our overweight to the U.S. relative to Canada and EAFE.
   
   Downloadable Copy
   
   ADVISOR USE ONLY
   Any statements contained herein that are not based on historical fact are forward-looking statements. Any forward-looking statements represent the portfolio manager’s best judgment as of the present date as to what may occur in the future. However, forward-looking statements are subject to many risks, uncertainties and assumptions, and are based on the portfolio manager’s present opinions and views. For this reason, the actual outcome of the events or results predicted may differ materially from what is expressed. Furthermore, the portfolio manager’s views, opinions or assumptions may subsequently change based on previously unknown information, or for other reasons. Equitable Life of Canada® assumes no obligation to update any forward-looking information contained herein. The reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Investments may increase or decrease in value and are invested at the risk of the investor. Investment values change frequently, and past performance does not guarantee future results. Professional advice should be sought before an investor embarks on any investment strategy.

   Posted July 27, 2023
9. Market Commentary January 2025

   Key Takeaways

   Full year 2024:

   • Despite reductions of policy-setting interest rates by central banks, yields on longer-term bonds finished the year higher than they started the year.

   • Positive risk appetite helped corporate bonds perform well, led by lower-quality issuers.

   • Global equity markets posted robust returns, with U.S. equities outperforming other developed markets, driven by heavy concentration into the ‘Magnificent 7’ stocks.

   Fourth Quarter:

   • Central banks continued to ease monetary policy in Q4, with the Bank of Canada cutting its policy interest rate more aggressively than did the U.S. Federal Reserve.

   • The Republican victory across both the executive and legislative branches in the U.S. ignited expectations of economic growth, pushing bond yields and stock prices higher.

   • Risk sentiment helped corporate bonds continue to outperform government bonds.

   • Markets remained volatile: while North American stock markets continued to outperform most international indices, Canadian stocks managed to outperform U.S. stocks in Q4, as sources of returns in the U.S. narrowed into year-end.

    

   Economic and Market Update

   Economic Summary: In the U.S., economic activity continued to expand at a solid pace in Q4. The rate of inflation continued to slow but remained above the central bank’s 2% objective. The labour market in the U.S. remained resilient, as the unemployment rate has remained low compared to historical norms. A decisive victory for Donald Trump and the Republican Party further boosted expectations for continued growth. The return of the President-elect’s old tactics of threatening tariffs to influence trade, security, and drug control re-introduced some economic uncertainty, particularly regarding the potential return of inflationary pressures. Those concerns prompted the Federal Reserve to slow the pace of its policy easing, as it lowered rates by just 0.25% at each of its two meetings in Q4, following the 0.50% cut in September. Throughout 2024, the Fed reduced rates by a total of 100 basis points, from 5.50% to 4.50%. Nonetheless, bond yields were significantly higher for most maturity terms during the fourth quarter as the market priced in not just a stronger economy than had been the expectation during Q3, implying less interest rate cuts by the Fed, but also growing concerns about the government deficit.
   
   In Canada, growth remained positive during 2024 and improved a bit to close the year, but continued to fall short of the Bank of Canada’s expectations. Similarly, inflation came in lower than expected and below the Bank’s 2% target. The labour market continued to soften for much of the year, with employment growth falling short of labour force growth. The weakness in the labour market and economy, along with tamed inflation, prompted the Central Bank to cut rates at the pace of 50 basis points at each of its two meetings in Q4. For the full year, the Bank of Canada ended up lowering its policy rate by a total of 175 basis points, from 5% to 3.25%. The market has been expecting the Bank of Canada to need to continue cutting rates due to slower economic growth in Canada, but the fear of a possible trade war with the U.S. has made the economic outlook somewhat murkier. 

   
   
   Bond Markets: During the quarter, yields on mid- to long-term bonds in Canada rose in sympathy with rising bond yields in the U.S. However, bond yields in Canada rose to a lesser extent, and yields on shorter-term bonds were actually little changed over the quarter. The FTSE Canada Universe Bond Index was basically flat during Q4 and posted a return of 4.2% for the full year. Although interest rates rose, credit spreads (i.e. the extra yield on corporate bonds versus government bonds to compensate for their extra risk) continued to grind lower, helping corporate bonds post positive overall returns in the quarter. Tightening credit spreads reflected the generally positive risk-on tone to the market, despite some volatility.  Lower-rated BBB bonds generally performed better than higher-quality A-rated bonds.  Credit spreads have now generally fallen back to levels similar to those experienced in 2021, when markets did quite well after the pandemic. The on-going appetite of investors for the extra yield offered by corporate bonds over government bonds is indicated not just by falling credit spreads, but also by investors’ enthusiasm to support the primary issuance market. Corporate bond supply continued to be very robust in the quarter, with $30 billion in new issuance, resulting in a record-breaking year with $141 billion of new issuance in 2024.  Nonetheless, on balance, we do not think the current risk premium adequately compensates for downside risk, particularly in longer-dated corporate bonds, and have a bias towards shorter-dated credit where we view the risk / reward trade-off as being more favourable.
   
   Stock Markets – Overview: Trump’s presidential victory and the Republican party’s ‘red sweep’ in the Senate and House of Representatives sparked optimism surrounding economic growth and a new era of U.S. exceptionalism. As a result, North American equity markets extended their rally in Q4, capping off a year of robust returns. The S&P 500 returned 2.4%, bringing its year-to-date return to 25%. Within the U.S., the broadening of returns paused during the quarter as the chase for growth intensified, with mega-cap growth names like Tesla driving performance. Canadian equities surprisingly outperformed the U.S. market over the quarter, returning 3.8% in Q4, despite threats of widespread tariff negotiations looming on the horizon that could negatively impact Canadian corporate fundamentals. At a sector level, strength in the technology, financials, and energy sectors more than offset weakness in telecommunication companies as well as in the materials sector. Elsewhere, major developed markets from Europe and Asia (EAFE) underperformed last quarter as deteriorating Chinese growth prospects and weak economic growth in the Eurozone weighed on equities. Notably, foreign investors of U.S. denominated securities benefitted from a rebounding U.S. dollar with the dollar index adding over 7.6% in Q4.
   
   U.S. Equities: U.S. equities remain supported by resilient margins and strong corporate earnings growth with over 70% of businesses surpassing bottom-line expectations last quarter. We remain attentive to the broadening of earnings performance and note that this trend has continued, albeit at a normalized pace versus prior quarters. More specifically, our work shows that members of the Russell 1000, excluding the Magnificent 7, posted median earnings growth of 6% last quarter, down from nearly 9% in Q3 but comparable to Q2 (6%). Looking forward to 2025, analysts continue to forecast U.S. exceptionalism, with forecasts of ~12% earnings growth.
   
   Following Trump’s presidential victory, stocks with greater sensitivity to the U.S. economy, such as small cap businesses, benefitted from expectations of domestically focused growth initiatives. However, stubborn inflation and expectations of fewer interest rate cuts by the Federal Reserve saw the trend of broadening sources of returns pause into the end of the year. Instead, market concentration reaccelerated with investors rushing back towards mega-cap growth stocks. In fact, Tesla – which is approximately 2% of the S&P 500 Index by market cap – contributed approximately one-third of the total index return in Q4, while the Mag 7 as a group contributed over 100% of total returns. In other words, U.S. large cap companies excluding the Magnificent 7 declined in aggregate last quarter.
   
   Canadian Equities: Against the backdrop of cooling inflation and below-trend growth, the Bank of Canada continued to loosen monetary policy. As a result, Canadian companies
   showed signs of improving efficiency with return on equity – a gauge of corporate profitability – improving versus prior quarters. Under these conditions, investors remained focused on higher quality, high-dividend paying companies – particularly within the financial sector. Relative to prior quarters, this group witnessed greater contribution out of non-bank financials (such as asset managers and insurance companies), as the premium investors were willing to pay for Canadian banks remained elevated. Across other sectors, the energy sector had a positive quarter as the price of oil stabilized, but falling prices for raw industrials pushed the materials sector lower.
   
   Bottom line: U.S. political developments and subsequent growth expectations dominated market sentiment last quarter. As a result, investors dialed back rate cut expectations and bond yields moved higher. In equity markets, the potential for an era of higher-for-longer rates prompted a resumption of investors crowding into growth stocks. Going forward, we remain cautious of elevated valuations and continue to prioritize diversified sources of returns with a long-term outlook. Nonetheless, despite rich valuations, our base case remains that investors’ enthusiasm for equities will persist in the near-term and stocks should continue to outperform bonds.
   
   Downloadable Copy
   
    

   Mark Warywoda, CFA VP, Public Portfolio Management	Ian Whiteside, CFA, MBA AVP, Public Portfolio Management	Johanna Shaw, CFA Director, Portfolio Management	Jin Li Director, Equity Portfolio Management
   Tyler Farrow, CFA Senior Analyst, Equity	Andrew Vermeer Senior Analyst, Credit	Elizabeth Ayodele Analyst, Credit	Francie Chen Analyst, Rates

   ADVISOR USE ONLY
   
   Any statements contained herein that are not based on historical fact are forward-looking statements. Any forward-looking statements represent the portfolio manager’s best judgment as of the present date as to what may occur in the future. However, forward-looking statements are subject to many risks, uncertainties, and assumptions, and are based on the portfolio manager’s present opinions and views. For this reason, the actual outcome of the events or results predicted may differ materially from what is expressed. Furthermore, the portfolio manager’s views, opinions or assumptions may subsequently change based on previously unknown information, or for other reasons. Equitable® assumes no obligation to update any forward-looking information contained herein. The reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Investments may increase or decrease in value and are invested at the risk of the investor. Investment values change frequently, and past performance does not guarantee future results. Professional advice should be sought before an investor embarks on any investment strategy.
   
    
10. Update on our service levels during the COVID-19 pandemic

    Supporting your clients and their plan members is more important than ever during the ongoing COVID-19 pandemic

    So, we’re providing an update on our service levels.

    We acted quickly to ensure there were no disruptions in service – most of our staff were working remotely from home and fully functional within a few days. We’ve reallocated resources from functions where volumes are down, such as dental claims, to those experiencing higher volumes. We also created a separate queue for COVID-19-related STD claims.

    As a result, we’ve been able to maintain the industry-leading service levels you have come to expect from us, and our turnaround times continue to be well within our targets.

    Here’s a summary of what you and your clients can currently expect in terms of average turnaround times:

    Service category	Average Turnaround Time (as of April 26th)
    Customer Care Centre wait times	89% of calls answered within 20 seconds
    Responses to emails to our Service Team	Within 24 hours
    Health claims	2 days
    Dental claims	2 days
    Life claims	1 day
    STD claims	4 days
    LTD claims	4 days
    Plan member updates	2 days
    New customer implementations	16 days
    COVID-19-related plan amendments	4 days
    Other plan amendments	8 days
    Quotes	2 days ahead of deadline

    We will closely monitor the situation and continue to adapt to ensure we maintain our service levels. And we will do our best to resolve any service issues that arise as quickly as possible.

    Please feel free to contact your Group Account Executive or myFlex Sales Manager and let us know how we’re doing.