CIBC predicts ‘powerful’ exodus from GICs through 2025
According to CIBC Capital Markets, yield hungry investors will flock to Canadian dividend stocks until the end of 2025.
Canadian banks, insurance companies and pipeline companies shares are expected to provide the highest benefit from the “yield trade” more slower than expected from GIC’S (guaranteed investment certificates).
Generally, the NICS given by banks, insurance companies and trust companies offer a guaranteed return on a fixed time period. The Canadian Bank (BOC) gained popularity in March 2022 when the COVİD-19 period began to increase the trend-determination policy rate. Now, the tables have returned to 225 basis points lower since the Central Bank after seven deductions from the Central Bank last summer.
Canada Bank is planned to announce its next wage decision on 30 July.
Ian de Vertuil from CIBC foresees a “powerful fund flow ından from NIGS, and will continue to migrate to high dividends-virtually Canadian stocks.
“We are still early at the beginning of the trade, and with more relaxation in the rest of the 2025, there is still a strong fund flow support for Canada stocks, still high dividend return,” he said.
In 2025, Verteuil, so far, TSX dividends for most performances and GYOs for most of the sectors (real estate investment partners), he said.
“Banks, insurance companies and pipelines have performed better than the perfect returns of the S&P/TSX composite supported by a rally in gold prices,” he wrote.
“Certainly, banks, insurance companies and pipelines will continue to benefit, but we expect to expand more to include public services, REITs and communication of ‘yield trade’.”
De Verteuil says that GICS is slower than expected despite a $ 100 billion output in the GICS, which takes place every three months every three months.
“There may be some surprise as to why the clan balances did not fall even more quickly. Some of them are only penalties for the duration of the book and most of them for the early cancellation of the narcine deposits,” he wrote.
“Another potential reason for the slow movement of the NIGS is the equity market volatility at the beginning of the year, which may have encouraged investors to renew their low risk of low -risks instead of more variable self -equity.”
Jeff Lagerquist is a senior reporter in Yahoo Finance Canada. Follow him on x @jefflagerquist.
