Canadian banks struggled through the correction period that finished off 2018. Toronto-Dominion (TD) and Bank of Nova Scotia (BNS) saw big losses up until Boxing Day, and did not see improvement until almost the New Year.

This week the majority of Canadian bank stocks surged, offering optimism to investors who saw a rough end of 2018. Funds that hold primarily Canadian bank stocks have not seen a full recovery from last years peak performance in mid-August, but restructuring is under way to start off the new year. Talks of a recession at the end of 2019 are something to keep in mind when reviewing your portfolio, many investors may begin exploring more defensive options as 2020 approaches. The banking and energy sectors are often safer options for higher risk investors when a recession is on the horizon.

A fund to review to give a clear look at Canadian banks, and energy is the TD Dividend Growth Fund (TDB972). Over 60% of it’s holdings consist of Canadian financial services, and Canadian energy. It paints a clear picture of how banks on aggregate perform in Canada.

Reference(s):

(n.d.). Retrieved from https://www.td.com/ca/en/asset-management/funds/solutions/mutual-funds/fundCard/TD Dividend Growth Fund – I/?fundId=11