Listen on The Move
Summary
In this timely episode of Insight is Capital, Pierre sits down with Ilan Kolet, Institutional Portfolio Manager at Fidelity Investments, to unpack Fidelity’s latest macro outlook and strategic asset allocation decisions—just as the world braces for another wave of geopolitical and trade disruption.
Drawing from Fidelity’s latest research piece titled "Elbows Up", Kolet shares why his team dialed back US equity exposure and tactically reallocated toward Europe. The conversation delves into the erosion of US institutional strength, rising stagflation risk, and the immense threat posed by potential tariffs on Canadian exports. Investors and advisors alike will find invaluable insights into positioning portfolios for resilience in a world increasingly defined by fragmentation and volatility.
Kolet’s clarity and candor shine through as he outlines how Fidelity is protecting investors from mounting uncertainty—without overreacting to short-term noise.
3 Key Takeaways:
- The Era of US Exceptionalism May Be Ending
The long-standing thesis of stable US leadership and policy consistency is being challenged by political and trade decisions that could erode its economic strength. Fidelity is reducing its US overweight and reallocating capital to Europe in response. - Stagflation Risks Are Rising
Fidelity has added to gold and TIPS to hedge against inflation pressures and slowing growth—hallmarks of stagflation. This reflects a more defensive posture without abandoning risk altogether. - Tariff Threats Pose a Major Risk to Canada’s Economy
Kolet outlines how a 25% US tariff on Canadian exports could lead to a 4–6% GDP drop, a 3% inflation shock, and significant currency depreciation—underscoring why Fidelity remains cautious on Canadian equities.
Chapters
00:00 – Intro: Why One Fire Tanked Industrial Production
01:05 – Today's Geopolitical Crossroads
02:44 – From US Exceptionalism to Strategic Repositioning
06:15 – Signs of Stagflation & Why Fidelity Bought Gold
09:04 – The Undermining of Institutional Strength in the US
12:41 – Valuations vs. Catalysts: Europe’s Turn to Shine
18:25 – Caution on Canada: Debt, Rates, and Tariff Fallout
22:29 – How Tariffs Could Hammer the Canadian Economy
30:03 – Who Really Pays for Tariffs? A Case Study in Washing Machines
36:57 – Manufacturing, Inflation, and Hollowed-Out Labor
39:37 – Supply Chain Disruptions & Auto Sector Insights
44:40 – Tactical Shifts: Gold, TIPS, and Currency Hedging
48:32 – Wrapping Up: Managing Through Uncertainty
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