solving a puzzle

Konrad Kopacz

The expert:
Konrad Kopacz, portfolio manager and investment advisor with Echelon Wealth Partners Inc. in Oakville, Ont.

The philosophy:
Kopacz uses a multi-faceted approach to investing, with a focus on high-networth clients and early-stage venture-capital investors. He incorporates a bottom-up style to investing in growth-based businesses and favours incorporating alternative investments into portfolios to help balance the risk/return profile.

The scenario: 52-year-old David, an accredited investor, inherited $10 million

The allocation:

Kopacz recommended an overall allocation of 65% to equities, 10% to private equity, 5% in fixed income and 20% to private debt.

  • 32.5% to mature, growing, profitable companies such as Calgary-based TransAlta Renew­ables Inc. (TSX: RNW), a renewable-power generation company; JPMorgan Chase & Co. (NYSE: JPM) and Alphabet Inc. (Nasdaq: GOOG).
  • 26% to “higher-growth, higher potential return companies” such as Argentina-based Mercado Libre Inc. (Nasdaq: MELI), host of the largest online commerce and payments ecosystem in Latin America; Washington-based ZoomInfo Technologies Inc. (Nasdaq: ZI), which became a household name during the pandemic; California-based Xilinx Inc. (Nasdaq: XLNX), a tech company; and Delaware-based Coinbase Global Inc. (Nasdaq: COIN), which operates a cryptocurrency exchange.
  • 6.5% to the Dynamic Global Growth Opportunities Fund “to add alpha in up or down markets.”
  • 5% to the Centurion Apartment REIT, for residential exposure.
  • 5% to the CanFirst IncomePlus Real Estate Fund, for industrial REIT exposure.

Kopacz said the real estate funds provide “a great way to gain exposure to illiquid but stable equity classes.”

  • 5% to the Pender Corporate Bond Fund, for potentially higher yields.
  • 10% to the NinePoint Alternative Income Fund, to capture higher yields without moving too far up the risk curve.
  • 10% to Cortland Credit Strategies LP, for access to short-term asset-based lending at the lower end of the risk scale.

“With inflation potentially rearing its ugly head, investing in private debt could continue to work well,” Kopacz said.

The scenario: David also received a $10,000 employment bonus

Given that this is a smaller account, Kopacz suggested using actively managed equity funds.

  • 25% to the Dynamic Active Global Dividend ETF (TSX: DXG).
  • 25% to the Pender Value Fund, for small- to mid-cap exposure.
  • 50% to the TD U.S. Blue Chip Equity Fund, for diversified U.S. exposure.

How-to-invest-David's Bonus and Inheritance

Alice Tsang

The expert:
Alice Tsang, vice-president and portfolio manager with Q Cantar Holdings Inc. in Toronto

The philosophy:
Tsang uses an active management strategy to pursue above-markettrend growth and/or risk-adjusted returns over the medium to long term, while focusing on capital preservation. She relies on top-down, fundamental and technical analysis to enhance returns and reduce risk. Her firm’s in-house portfolios are reviewed and rebalanced regularly to meet ongoing market changes.

The scenario: 30-year-old Judy inherited $10 million

The allocation:

  • 30% to U.S. equities. Tsang’s top picks include the iShares US Medical Devices ETF (NYSEARCA: IHI); Costco Wholesale Corp. (Nasdaq: COST), which Tsang said has room for expansion and growth; Microsoft Corp. (Nasdaq: MSFT), which “has been executing nearly flawlessly over the past few years;” and California-based Nvidia Corp. (Nasdaq: NVDA), a leader in the semiconductor space.
  • 20% to Canadian equities. Tsang’s top picks include Sun Life Financial Inc. (TSX: SLF), “a benefactor of rising interest rates and strong capital markets”; the iShares S&P/TSX Global Base Metals Index ETF (TSX: XBM), because “there’s a resurgence in resource prices due to supply cuts over the years and Covid bottlenecks, [and] the sector is inexpensively valued”; Montreal-based WSP Global Inc. (TSX: WSP), a professional services company, which “should be able to maintain its growth, as spending on projects is expected to remain intact”; and Winnipeg-based Boyd Group Services Inc. (TSX: BYD), one of the largest operators of auto collision and glass repair centres in North America.
  • 15% to the Q Marsico Ten Fund, which invests in U.S. growth companies.
  • 15% to the Q Marsico Global Fund, which invests in global growth companies. The Q funds typically hold eight to 12 names each, Tsang said. “They are agnostic to market capitalization and are not encumbered by mandates and/or restrictions,” she added.
  • 20% to cash, for liquidity and to take advantage of opportunities that may arise in “order to obtain better average pricing for the entire portfolio.”
The scenario: Judy also received a $10,000 employment bonus

The allocation:

  • 20% to the iShares S&P/TSX 60 Index ETF (TSX: XIU).
  • 30% to the iShares Core S&P 500 Index ETF (TSX: XSP), which is hedged to the Canadian dollar.
  • 15% to the Q Marsico Ten Fund.
  • 15% to the Q Marsico Global Fund.
  • 20% to cash, for liquidity and to take advantage of buying opportunities.

Judy's bonus and inheritance