Laser-focused portfolio managers will find opportunities in 2023

When it comes to investment strategy, Larson tries to stay high level but understands the desire to get down to the brass tacks of MLD’s success in 2022. He attributes it to getting in front of the year by being underweight in tech and overweight energy, maintaining their place within the fixed income realm, and the strong relationships the group has cultivated with some of the best credit managers across the globe. MLD, which resides under the Canaccord Genuity Wealth Management umbrella, didn’t suffer the drawdown the conventional 60/40 advisors did, nor the fate of those caught long on a lot of equity and tech especially.

Though early, Larson says the worst is over and MLD recently made a call on duration, adding long duration in anticipation that eventually rates will start to come down. This is where investors really got hurt, but in the wake of the fastest rate hike in modern history “there’s a lot of opportunity for us on the rebound,” he says, adding that he sees metals and materials as another area that will drive the market forward through phase three of the economic cycle.

“We’re already seeing investors that have a meaningful gold weighting have an incredible start to January: the large cap golds are going to do great,” he says.

Oil fields “are iffy right now,” despite the fact they performed well over the last 18 months and served as a place that could be harvested by those who entered December needing to put some gains on the books. But that said, “we’re seeing a lot of smart money starting to build along with trepidation.”

“There are two sides of the coin that are very loud with what’s going to happen with the demand picture and whether China maintains their zero COVID policy and demand ramps back up.” Larson says. “But valuations are such that we remain exposed to the space.”

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