After much speculation in recent years about its appetite for additional U.S. bank M&A, TD offered ~US$13.4 bln in cash to buy First Horizon Corporation (FHN)[1], a Tennessee-based regional bank, in late February, almost 15 years since its last “large” U.S. bank acquisition – Commerce Bancorp. In our view, the acquisition offers many strategic benefits given FHN: (i) is an optimal size, adding material scale with…
Insights: United States
Video: Market Outlook and Q&A with Ed Yardeni and Rob Wessel
Hamilton ETFs presents a Q&A with prominent Wall Street strategist, Ed Yardeni, moderated by Rob Wessel. Ed has been one of the most influential Wall Street strategists over the last 30 years and is regularly on CNBC. Rob asks Ed for his outlook on the U.S. and global equity markets, inflation, interest rates and, of course, the financials. Disclaimer: Commissions, trailing commissions, management fees and…
Canadian Banks: BMO’s High Risk, High(er) Reward Acquisition of BoW
Bank of Montreal recently announced the acquisition of BNP Paribas’ U.S. retail banking subsidiary, Bank of the West (BoW) for ~C$20 bln – the largest acquisition in Canadian banking history. The transaction is very different from prior acquisitions made by the Canadian banks and is further complicated by the fact that BoW is not publicly traded (wholly owned by BNP), so most Canadian investors have limited…
U.S. Banks: M&A Features Prominently on Q1 Calls
[All values in U.S. dollars unless otherwise noted] As we noted in last week’s Insight, U.S. Financials: Why They Remain Attractive (Especially the Mid-Caps), the Q4 2020 pick-up in U.S. bank M&A – a clear sign of management’s conviction that the economic recovery was well underway – has gained momentum in 2021, including several transactions involving Hamilton U.S. Mid/Small-Cap Financials ETF (tickers: HUM, HUM-U) and Hamilton…
U.S. Financials: Why They Remain Attractive (Especially the Mid-Caps)
[All values in U.S. dollars unless otherwise noted] One year on from the market depths of the pandemic, it is worth a quick review of how far the U.S. financials have come. Notwithstanding the fact Ontario recently entered another province-wide lockdown, things south of the border look far brighter, especially for the holdings in the Hamilton U.S. Mid/Small-Cap Financials ETF (tickers: HUM, HUM-U) and much of…
Fintech/Cdn Banks: Can Standalone Digital Banks Disrupt the Incumbents?
In the coming weeks, we will publish a series of insights on financial innovation discussing several powerful secular trends relating to financial technology/innovation and its impact on the global financial services sector. We will also review how these trends influence the investment strategy of the Hamilton Financials Innovation ETF (HFT). Part I: Can Standalone Digital Banks Disrupt the Incumbents? Part II: Four Themes Driving Innovation in…
U.S. Banks: The Return of M&A – A Clear Sign of Bankers’ Conviction in the Recovery
All values in U.S. dollars unless otherwise noted. As the year draws to a close, the whipsaw nature of 2020 will not soon be forgotten. When the pandemic struck earlier this year and businesses shuttered under direct orders by various governments, how long and how deep the resulting global economic downturn would be was next to impossible to forecast with any sense of accuracy. As businesses…
Hamilton Financials Innovation ETF: Invest in Digital Leaders Reshaping the Financial Sector
When most investors think of the financial sector, they think about the traditional financial subsectors, like commercial banks, investment banks, and insurance. However, the rapid advancement of technological innovation has created an entirely new category of financials and transformed others. In our view, this category has become so large and established that it should comprise a material portion within all investors’ financial sector equity allocations. Not…
Global Financials: The Most Attractive/Important Investment Themes in 2021
Hamilton Global Financials ETF (HFG), which launched on June 26, 2020, is focused on investing in high quality global financial stocks with strong balance sheets, diversified income streams and exposure to favorable, medium- and long-term cyclical and secular trends. This focus aims to provide Canadian investors with diversified exposure to the most attractive themes within the global financial sector while maintaining a volatility profile not materially…
Financials: Does COVID-19 Represent a Growth Scare, Credit Event or Crisis?
Since we launched our first ETF in January 2016, there have been four significant macro corrections in four years. None of those large and painful corrections represented a crisis, insofar as the declines did not represent a threat to the solvency of the financial sector, either from a lack of liquidity or the destruction of capital. Rather, they were related to the market rapidly (and, in…
One Chart: When/Where the Canadian Banks Spent US$32 bln on U.S. Banks
All Canadian bank investors know that expansion into the U.S. personal and commercial (“P&C”) banking sector remains the focal point of capital deployment for the Canadian banks. In fact, US banking has been – by far – the largest destination of capital deployment since 2004 (when TD Bank acquired a majority stake in Banknorth), with the Canadian banks having spent a huge US$30 bln. The chart…
One Chart: U.S. Bank M&A Doubles in 2019 (and Why We Expect More)
In the 10+ years since the global financial crisis, deal values in U.S. bank M&A have been slow to reach pre-crisis levels. This is notable since in the nearly 25 years preceding the financial crisis bank M&A was an important theme (particularly between 1995 to 2007) as the chart below highlights. Note to Reader: This Insight includes references to certain Hamilton ETFs that were active at…