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Market Outlook

Get information and expert opinions on a variety of current financial, investment and economic issues.

2024 Starlight Capital Diversified Equities Outlook

January 22, 2024

  • 2023 was a tumultuous year in equity markets, but ultimately concluded on a strong note in both Canada and the United States. The initial half of the year featured a regional bank liquidity crisis that had reverberations throughout the market. The S&P 500 returned 26% in 2023 mainly driven by the Magnificent Seven.
  • Despite the recent conclusion of interest rate hikes, there remains a concern that, unless inflation stabilizes, global economies may be vulnerable to an extended period of elevated interest rates. The trajectory of yields will continue to be an important economic variable throughout 2024, particularly for Canada, where interest rate sensitivity is elevated.
  • We maintain our view that quality will be a leading factor in 2024 with a shift towards cheaper pockets of quality as measured by free-cash-flow yields. Investors concerned about the potential for a recession should look to dividend compounders as they have historically outperformed prior to and after recessions. We believe it is too early for a full risk on rotation, however we also don’t believe portfolios should be overly defensive. A balanced portfolio of high-quality businesses makes the most sense to us.
  • Starlight Capital’s strategy for diversified equities centers around four core areas of emphasis: high-quality growth at a reasonable price for growth portfolios, high-quality dividend growth stocks for equity income portfolios, maintaining a balanced approach to risk management and portfolio construction, and paying close attention to valuation levels, particularly Free Cash Flow (FCF) yields.

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2024 Starlight Capital Global Real Estate Outlook

January 22, 2024

The best word that sums up 2023 for global REITs is volatility, which saw periods of both rally and retreat with the expectation that the Federal Reserve Bank and the Bank of Canada rate hike cycles were nearing their end.

In Q4 2023, the resumed downward trend in inflation coupled with the prolonged pause in rate hikes has finally given the global REIT market a sustainable rally.

In 2024, we are at an inflection point for global markets as several key macro inputs are reversing course. Both the Federal Reserve Bank and the Bank of Canada have communicated that they will begin cutting rates in 2024.

The Starlight Global Real Estate Fund is positioned to take advantage of several global macro trends that should continue to drive value creation in 2024, including housing shortage, global reshoring and trade, and digital real estate.

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2024 Starlight Capital Global Infrastructure Outlook

January 15, 2024

Last year was a difficult year for infrastructure investors. Rising central bank rates, treasury yield volatility, supply chain constraints and capital cost inflation caused investors to adopt a defensive posture and turn away from typically stable infrastructure assets.

Looking ahead to 2024, we believe that last years’ interest rate volatility has led to a ‘flight to safety’, driving up the valuation of defensive assets (i.e. consumer staples, telecoms). Conversely, our Starlight Global Infrastructure Fund positions are pricing in very modest expectations that, we believe, they will exceed in 2024.

Using valuation as our guide, we remain focused on high-quality infrastructure businesses that generate above-average returns across the economic cycle, exhibit capital discipline and are driven by secular growth tailwinds along the long-term investment themes of decarbonization, infrastructure renewal and digital connectivity.

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North American Real Estate: Q1 2023 Update

April 6, 2023

North American REITs were oversold at the end of 2022 and trading well below their Net Asset Value (“NAV”), even after adjusting for cap rate expansion. Adjusting for their relative growth rates, North American REITs trade at very attractive risk-adjusted total return levels.

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2023 Global Market Outlook ft. Piper Sandler’s Michael Kantrowitz

December 19, 2022

Global Markets are under pressure from several headwinds, including US dollar strength, rising commodity prices and long term interest rates. Simultaneously, global markets are experiencing elevated levels of inflation, forcing central banks to raise policy rates aggressively. Our 2023 Global Market Outlook featuring Michael Kantrowitz, Chief Investment Strategist and Head of Portfolio Strategies at Piper Sandler shares insights and provides usable takeaways on the year ahead.

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Starlight Global Macro & Real Assets Outlook

November 10, 2021

As we move into the next phase of the business cycle, investors will have to form opinions on major shifts in fiscal and monetary policy and their impact on global markets. Global growth remains above the long-term average for 2021 and 2022. However, the absolute level of growth is declining as we move beyond comparisons to the pandemic lows and fiscal stimulus rolls off.

Key takeaways:

  • Several impediments to global growth have emerged including increasing labor costs and commodity prices, rising borrowing costs and supply chain challenges.  This will put pressure on corporate margins and earnings
  • Long bond yields will follow the 2014 path and plateau below their pre-tapering level
  • Real assets stand to benefit from the numerous structural drivers of performance that existed prior to the pandemic.  They have extended maturities and locked in low cost structures for years to come

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2021 Global Markets and Starlight Capital’s Funds’ Outlook

February 10, 2021

Looking forward, 2021 will be heavily impacted by the rollout of COVID-19 vaccines and the change in administration after the U.S. election. These two issues will determine the pace of reopening global economies and the legislative agenda for the U.S. congress, respectively. Gain insights from our portfolio management team on their outlook for this year and a closer look into recent fund performance.

Key takeaways:

  • 2021 will be heavily impacted by the rollout of the COVID-19 vaccines and the agenda of the Biden administration.
  • Market returns will shift from being driven by multiple expansion to being driven by earnings growth.
  • 2021 is an ideal backdrop for active managers to outperform.

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Starlight Capital Presentation – Covid-19 Real Estate Outlook featuring CBRE

May 13th 2020

Please listen to a playback of our recent conference call with Dennis Mitchell, CEO & CIO and Paul Morassuti , Vice Chairman, Valuation & Advisory Services, CBRE Canada. Paul shares his views on the future of the multifamily, industrial, office, retail, and hotels sectors. He also reviews current fundamentals, the impact of Covid-19 and the recovery prospects for each sector.

Keynote Speakers

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Diversify with Private Real Assets: Introducing Starlight Capital Private Pools

April 30, 2020

Please listen to a playback of our recent conference call with Dennis Mitchell, CEO & CIO discussing the Starlight Capital Private Pools.  The private pools provide accredited investors with access to institutional private real estate and infrastructure managed by some of the world’s largest private asset managers.

Keynote Speakers

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Real Assets Performance During the COVID-19 Sell Off

April 13, 2020

Starlight Capital is pleased to replay the recent conference call with Dennis Mitchell, CEO & CIO, and Mark Herzog, Managing Director, Institutional Equities, CIBC World Markets Inc. Where they answer the following and many more questions.
  • What types of market participants were buying and selling during the sell-off?
  • Were there any sector-specific issues that led to REITs, Utilities and Infratech names selling off?
  • In light of the discounts we are seeing in the market, are investors looking to move capital into REITs, Utilities and Infratech names?

Keynote Speakers

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2020 Global Real Assets Outlook Conference Call

January 17, 2020

Hear from Dennis Mitchell of Starlight Capital, Daniel Drimmer of Starlight Investments and Alina Osorio of Fiera Infrastructure as they provide their outlook for global real estate and infrastructure markets.

Keynote Speakers

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2020 Global Markets and Starlight Capital’s Funds’ Outlook

January 17, 2020

With global equity returns expected to moderate in 2020 and long bond yields expected to remain low, institutions continue to allocate capital to real assets as returns for real estate and infrastructure are expected to remain attractive. Gain insights from our portfolio management team on their outlook for this year and a closer look into our recent fund performance.

Key takeaways:

  • Global economic growth is forecast at 2.9% in 2020 as investment and trade gradually recover from last year’s significant weakness, but downside risk remains.
  • The outlook for real assets in 2020 is robust with total returns underpinned by strong, expected internal growth and tax-efficient yields.
  • In 2019, Starlight Capital’s funds delivered strong total returns, beating their respective benchmarks and generally went up when global and U.S equities went down.

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Starlight Hybrid Global Real Assets Trust – Private Placement, Update and Outlook

November 19, 2019

Dennis Mitchell, CEO & CIO of Starlight Capital, discusses the Starlight Hybrid Global Real Assets Trust and the private placement. The Trust generates long-term capital appreciation through exposure to institutional quality real assets in the global real estate and global infrastructure sectors.

Keynote Speakers

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Global Real Estate Update and Outlook

Keynote Speakers

February 6, 2019

Hear from industry experts on their outlook for real estate and how this sector can enhance client portfolios and contribute to client returns.
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Global Infrastructure Update and Outlook

Keynote Speakers

January 30, 2019

Hear from industry experts on their outlook for infrastructure and how this sector can enhance client portfolios and contribute to client returns.
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Analysts Remain Optimistic on REITs for 2019

January, 2019

By: Diane Rusignola, NAREIT

After a volatile 2018, REITs are prepared to meet the challenges of 2019, including a number of macroeconomic factors like global trade, which has become more visible and volatile over the past year. But with strong performance anticipated in sectors including retail, data centers, and apartments, analysts say investors should still expect REIT stocks to perform well this year.


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Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any mutual funds managed by Starlight Capital. These views are not to be considered as investment advice nor should they be considered a recommendation to buy or sell. Documents (including press releases) regarding the various investment funds that are managed or advised by Starlight Capital are provided for information purposes only and cannot be relied on to be complete, exhaustive or error-free unless the complete set of documents for any given investment fund with respect to which information is being sought is reviewed and then only on SEDAR (www.sedar.com).

Forward-looking statements
Any “forward-looking” statements contained in this Website represent Starlight’s views of possible future events or circumstances and are based on our observations and analysis of current events and trends. These statements are generally expressed in the future tense and may not be expressly identified as forward-looking statements. Forward-looking statements are based on assumptions made by Starlight regarding our beliefs and opinions, and are subject to a number of mitigating factors. Forward-looking statements may prove to be incorrect. Economic and market conditions may change, which may materially impact the views of Starlight, our actual course of conduct and the success of our intended investment strategies.
 
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