Tax-Loss Selling 2016
‘Tis the Season
November 2016
CONTENTS
CONTENTS ............................................................................................................. 2
Tax-Loss Selling 2016 ............................................................................................. 3
Heading Towards Year-end ......................................................................................................... 3
Waiting Until Next Year? ............................................................................................................. 3
Key Dates For 2016 .................................................................................................................... 3
Market Environment.................................................................................................................... 4
Tax-Loss Selling Is Concentrated ............................................................................................... 6
The Art of Window Dressing ........................................................................................................ 6
What to Watch For ....................................................................................................................... 6
Tax-Loss Selling with ETFs ........................................................................................................ 13
Upgrade Your Holdings.............................................................................................................. 14
Page 2
Tax-Loss Selling 2016
Tax-Loss Selling 2016
Heading Towards Year-end
As we progress through November, investors should begin thinking about the year ahead and planning for potential tax losses –
selling their losing positions to offset capital gains. Based on Canadian tax law, capital losses can offset capital gains in any fiscal
year. Losses must first be applied against capital gains in the current year; if any excess losses remain, they can be applied
against capital gains made in the prior three years, or be used to offset capital gains in future years.
For example, if an investor had purchased 100 shares of XYZ Corp. at $40.00, and sold it in 2016 at $20.00 a share (on a net
basis, including brokerage fees), the investor would now have a capital loss of $2,000. This loss can be used to reduce certain
capital gains this year by $2,000. If there are no applicable capital gains this year, then this $2,000 capital loss can be carried
forward to future years, or applied against capital gains accrued in 2013, 2014, and 2015 resulting in a tax credit or refund.
But Remember…
Capital-loss selling cannot be applied to registered accounts, such as Registered Retirement Savings Plans (RRSP), Registered
Educational Savings Plans (RESP), Registered Retirement Income Fund (RRIF), Registered Disability Savings Plan (RDSP), or TaxFree Savings Accounts (TFSA). As well, capital losses will be foregone when you transfer a losing position from a non-registered
account into a registered account.
If you are selling stock at a loss, you (and your spouse/common-law partner) must wait at least 30 days before repurchasing the
same securities to avoid Canada Revenue Agency’s (CRA) “superficial loss” regulations. If you repurchase the shares within this
30-day window, CRA will determine that the trade was a “superficial loss”, and you will be denied the benefits of the transaction.
Given the complexity of tax laws, consult your Investment Advisor and tax professional before considering any tax-loss related
strategies.
Waiting Until Next Year?
If you are selling securities at a profit in 2016, should you consider waiting until 2017 to make the sale? Waiting until the New
Year to sell profitable positions will defer the payment of your taxes by a full year. Your taxes for 2017 won’t be due until you file
your tax return in April, 2017. Caveat Emptor: Not wanting to pay tax in the current year may well be one of the worst reasons not
to crystalize a capital gain.
Key Dates For 2016
Friday, December 23, 2016 is the last day for tax-loss selling for Canadian taxpayers selling Canadian equities. There are no
alternatives if you leave trades beyond this date.
Tuesday, December 27, 2016 is also the last day for tax-loss selling of U.S. equities for Canadian taxpayers. Once again there are
no alternatives should you wait beyond this date.
Friday, December 30, 2016 is also the last day for RESP contributions, 2016 charitable contributions and 2016 TFSA
contributions.
Page 3
Tax-Loss Selling 2016
Market Environment
What started off as a down-year, 2016 has thus far proven to be a good year for the markets, with all three major U.S. Composite
Indexes hitting all-time-highs. Year-to-date, leading the way is the S&P 500, up 7.84% the NASDAQ is up 3.6%, while the Dow
Jones Industrial Average is up 6.68%. Despite these highs, it has felt as if something’s been holding the market back in recent
months. Canaccord Genuity Chief Portfolio Strategist Tony Dwyer says the issue for the market since mid-July isn’t the
fundamental backdrop, it is the level of conviction to act on that fundamental backdrop when the market declines. It is so
important during the corrective periods to remember recessions are driven by sharply higher inflation expectations that drive the
Fed to tighten enough to cause the yield curve to invert thus shutting down credit. Dwyer adds there has also been a degree of
uncertainty over what investors can expect from a Trump Presidency. There is no question investors are going to have to grapple
with increased volatility as the election dust settles. At this point, it is impossible to answer whether President Trump will be
different than candidate Trump. Dwyer says there will be much speculation in the coming weeks about what President Trump
might do, investors should stay focused on what we know: The only time to expect a significant and sustainable decline in broad
equity prices is following very tight credit conditions that cause a recession. Time and again, as the market corrects, fear of
pending recession and “it’s different this time” clog the inboxes and airways. Over the past 65 years (including the current cycle),
there has not been a U.S. recession while: 1) The Real Fed Funds Rate remains negative; 2) The yield curve remains positive; 3)
With no stress being priced into the Chicago Fed’s National Financial Conditions sub-indices. Although anything is possible given
the election outcome, it is pretty hard to make a sustainable negative economic case with (a) stable inflation, (b) a still historically
accommodative Fed that is slow to act, (c) a demographic tailwind, (d) a turn in the global picture, and (e) a positive trend in S&P
500 (SPX) EPS and valuations.
In Canada, the major indexes bounced back from a disappointing 2015. The S&P/TSX 60 Index is up 13.71%, while the S&P/TSX
Composite Index has risen 13.52%. The S&P/TSX Venture Index has posted a significant 43.3% increase, year-to-date. Canaccord
Genuity North American Portfolio Strategist Martin Roberge says the good news is that for the first time since 2009, the
composite leading economic indicator (LEI) for BRIC (i.e., Brazil, Russia, India and China) countries has pushed into the expansion
territory. Central banks in emerging markets (EMs) are pressing hard on the monetary reflation pedal to kick-start growth. Their
efforts are bearing fruit. The bad news is that the LEI for the G7 countries remains in the contraction zone and monetary policy as
a stimulative tool is nearly exhausted. The net result is a desynchronized world economic cycle which should persist until
governments in the developed markets (DMs) embrace fiscal reflation. Roberge believes this pivot point is approaching - It is just
common sense. The cost of debt associated with government spending is nil as Treasury bond yields in most countries remain
below trend GDP growth rates. Roberge says that, at a minimum, reducing fiscal drag should be a priority among world
governmental authorities in 2017. After taking a positive view on the CDN$ at the beginning of the year, Roberge now believes
that the cyclical rally is maturing. His view is that a relapse to the low 70s is in the cards for 2017 despite firming oil prices and
EM’s positive economic momentum. While these factors are normally CDN$ supportive, at times, a decoupling can occur.
Roberge believes Canada’s weakening fiscal and economic fundamentals will trigger this decoupling.
Market Return Calculations as of November 10, 2016.
Page 4
Tax-Loss Selling 2016
Figure 1: S&P/TSX Sector Performance Year-To-Date – Best to Worst (As of November 10, 2016)
Sector
S&P/TSX Global Gold
S&P/TSX Global Base Metals
S&P/TSX Global Mining
S&P/TSX Eq Wght Glb Base Metal
S&P/TSX Capped Materials
S&P/TSX Venture
S&P/TSX SmallCap
S&P/TSX Eq Wght Oil & Gas
S&P/TSX Capped Energy
S&P/TSX Composite Equal Weight
S&P/TSX Capped Industrials
S&P/TSX Comp. High Dividend
S&P/TSX Dividend Composite
S&P/TSX Eq Wght Divers Banks
S&P/TSX Capped Telecom Serv
S&P/TSX 60 Shariah
S&P/TSX 60 Capped
S&P/TSX 60
S&P/TSX Composite
S&P/TSX Comp Capped
S&P/TSX Completion
S&P/TSX Comp Total Return
S&P/TSX Capped Utilities
S&P/TSX Capped Financials
S&P/TSX Capped Cons Staples
S&P/TSX Cdn Dividend Arist.
S&P/TSX Capped REIT
S&P/TSX Income Trust
S&P/TSX Capped Info Tech
S&P/TSX Capped Cons Discretion
S&P/TSX Capped Real Estate
S&P/TSX North Amer. Preferred
S&P/TSX Preferred Share
S&P/TSX North Amer. Preferred
S&P/TSX Capped Health Care
Sym bol Y TD C hange (%)
TTGD-I
71.00
TXBM-I
53.90
TXGM-I
52.10
TXBE-I
51.20
TTMT-I
48.10
JX-I
43.30
TXXX-I
27.10
TXOE-I
27.00
TTEN-I
26.60
TXCE-I
19.70
TTIN-I
18.00
TXEI-I
16.20
TXDC-I
15.50
TXDE-I
15.20
TTTS-I
14.50
TXSI-I
14.30
TXCI-I
13.60
TXLX-I
13.60
TSX-I
13.50
TSXC-I
13.50
TXMC-I
13.40
TSXT-I
12.70
TTUT-I
11.80
TTFS-I
10.90
TTCS-I
8.80
TXDV-I
8.40
RTRE-I
7.40
RTCM-I
5.80
TTTK-I
4.10
TTCD-I
3.20
TTRE-I
1.90
STNU-I
0.30
TXPR-I
-0.80
STNC-I
-2.90
TTHC-I
-42.80
Source: The Globe and Mail
Page 5
Tax-Loss Selling 2016
Tax-Loss Selling Is Concentrated
In general, tax-loss selling tends to be concentrated in November and the first two weeks of December, with some investors going
back into the market after this to take advantage of reduced equity values in the second half of December. Note, investors
should be cautious about selling early in order to exploit market weakness later on in the year, as that scenario may not always
play out as expected.
The Art of Window Dressing
Money managers often clean up their portfolio holdings before the end of the tax year. Approximately 50% of U.S. mutual funds
have a fiscal year-end between October and December. They tend to sell stocks with large losses to avoid reporting them in their
year-end report. This window dressing causes downward pressure on stocks that have already been seriously beat up and are
trading near their 52-week lows towards the end of the year. However on a positive note, once this downward pressure subsides,
these stocks are likely to experience a price reversal.
What to Watch For
Year to date, the S&P/TSX Composite Index is weighted towards the losers with 130 members down, 116 gainers and one
unchanged. At this time last year, the Index was weighted heavily towards the decliners with 176 decliners, 72 gainers and none
unchanged.
The larger-cap S&P/TSX 60 Index is slightly weighted towards decliners, with 31 members down, 29 members up and none
unchanged. At this time last year, there were 18 gainers, 41 decliners and one unchanged. We believe that the worst- and bestperforming equities are the ones to monitor.
Page 6
Tax-Loss Selling 2016
Figure 2: Figure 2: S&P/TSX Composite Index - Best Performers Year-To-Date (As of November 10, 2016)
C om pany
Teck Resources
Ivanhoe Mines
Endeavour Mining Corp.
Iamgold Corp.
First Majestic Silver
First Quantum Minerals
B2Gold
Guyana Goldfields Inc.
Pan American Silver
Klondex Mines Ltd
Bonavista Energy Corp.
Asanko Gold Inc.
Westshore Terminals Investment
Silver Standard Resources
Barrick Gold Corp.
Alamos Gold
Birchcliff Energy
Seven Generations Energy
Kinross Gold
EnCana Corp.
MAG Silver Corp.
Enerplus Corp.
Yamana Gold Inc.
Silver Wheaton
Agnico Eagle Mines
Torex Gold Resources
Pretium Resources
TMX Group
New Gold
Premium Brands
Crew Energy Inc.
Kirkland Lake Gold
Sandstorm Gold Ltd.
NuVista Energy Ltd
Labrador Iron Ore Royalty
Sleep Country Canada Holdings
Lundin Mining
Great Canadian Gaming
Tourmaline Oil
Parex Resources Inc.
Waste Connections
TORC Oil & Gas Ltd.
Altus Group
Lucara Diamond
OceanaGold
Saputo Inc.
Russel Metals
Kinaxis Inc.
Bonterra Energy Corp.
Kelt Exploration
Sym bol
TCK.B-T
IVN-T
EDV-T
IMG-T
FR-T
FM-T
BTO-T
GUY-T
PAA-T
KDX-T
BNP-T
AKG-T
WTE-T
SSO-T
ABX-T
AGI-T
BIR-T
VII-T
K-T
ECA-T
MAG-T
ERF-T
YRI-T
SLW-T
AEM-T
TXG-T
PVG-T
X-T
NGD-T
PBH-T
CR-T
KLG-T
SSL-T
NVA-T
LIF-T
ZZZ-T
LUN-T
GC-T
TOU-T
PXT-T
WCN-T
TOG-T
AIF-T
LUC-T
OGC-T
SAP-T
RUS-T
KXS-T
BNE-T
KEL-T
Price ($ ) Y TD C hange (%) Dividend Y ield (%)
29.90
459.40
0.33
2.45
282.00
22.58
212.60
5.48
193.90
12.10
178.00
15.49
177.40
0.10
3.57
162.90
7.35
152.30
22.10
150.90
0.30
6.99
147.30
4.24
135.70
0.93
4.69
135.50
26.50
126.00
2.43
15.37
125.70
21.55
125.20
0.46
10.09
121.30
0.27
8.50
120.50
29.33
115.40
5.01
112.00
13.98
102.10
0.56
19.08
99.40
8.81
91.20
1.32
4.65
87.90
0.55
28.35
87.40
0.83
64.31
86.10
0.79
21.48
82.80
12.15
81.90
64.71
79.90
2.80
5.61
77.60
65.47
74.50
2.28
6.91
72.60
8.08
72.30
5.94
72.20
6.75
69.30
16.34
66.70
6.25
28.11
62.70
2.14
6.47
60.80
25.17
60.00
34.24
53.40
15.58
53.10
102.40
51.90
0.94
7.60
50.50
3.10
29.02
49.60
2.07
3.37
48.00
1.80
3.75
45.50
45.21
45.40
1.25
24.40
45.10
6.52
68.63
45.00
24.15
44.90
4.81
5.83
43.90
-
Page 7
Tax-Loss Selling 2016
Source: The Globe and Mail
Figure 3: S&P/TSX Composite Index - Worst Performers Year-To-Date (As of November 10, 2016)
C om pany
Valeant Pharmaceuticals Intl.
DH Corporation
Martinrea International.
Linamar Corp.
Just Energy Group
Cameco Corp.
MEG Energy Corp.
Enghouse Systems
Canfor Corporation
Empire Company
BlackBerry Limited
Aimia Inc.
Colliers International Group
DHX Media
Pason Systems
Dominion Diamond
ProMetic Life Sciences
Stella-Jones Inc.
CI Financial
Mitel Networks
West Fraser Timber Co.
Western Forest Products
MacDonald Dettwiler & Assoc.
Intertain Group
Gildan Activewear
ATS Automation Tooling Systems
Alaris Royalty
Uni-Select Inc.
North West Company
Brookfield Property Partners
Element Fleet Management
Aecon Group
Magna International
Hudson's Bay Co.
Sierra Wireless
Artis REIT
Tricon Capital Group
Cominar REIT
Stantec Inc.
Extendicare Inc.
Potash Corp. of Saskatchewan
Manulife Financial
Keyera Corp.
Crescent Point Energy
Great-West Lifeco
Osisko Gold Royalties Ltd.
Imperial Oil
Interfor Corporation
George Weston
Dream Office REIT
Sym bol Price ($ ) Y TD C hange (%) Dividend Y ield (%)
VRX-T
21.89
-84.70
2.36
DH-T
15.73
-52.50
8.52
MRE-T
6.95
-35.30
1.76
LNR-T
48.74
-35.20
0.83
JE-T
6.78
-33.40
7.60
CCO-T
11.82
-33.00
3.50
MEG-T
5.41
-31.80
ENGH-T
51.22
-31.40
1.10
CFP-T
14.34
-30.80
EMP.A-T
17.97
-29.30
2.25
BB-T
9.54
-25.70
AIM-T
7.57
-23.00
11.03
CIGI-T
48.06
-22.40
0.28
DHX.B-T
6.64
-21.60
1.08
PSI-T
15.82
-21.10
4.44
DDC-T
11.57
-19.90
4.73
PLI-T
2.69
-19.90
SJ-T
43.39
-18.10
0.93
CIX-T
25.71
-17.30
5.45
MNW-T
8.81
-17.00
WFT-T
44.85
-16.80
0.64
WEF-T
1.87
-16.40
4.23
MDA-T
71.91
-15.30
2.10
IT-T
8.74
-14.70
GIL-T
34.00
-13.70
1.22
ATA-T
9.60
-13.60
AD-T
21.00
-13.60
7.98
UNS-T
29.94
-12.70
2.27
NWC-T
24.93
-12.30
4.93
BPY.UN-T
28.07
-10.80
5.21
EFN-T
12.09
-9.80
0.83
ARE-T
13.98
-9.30
3.30
MG-T
51.62
-9.30
2.63
HBC-T
16.73
-9.10
1.22
SW-T
20.09
-9.00
AX.UN-T
11.67
-9.00
9.27
TCN-T
8.84
-7.30
3.10
CUF.UN-T
13.83
-5.60
10.59
STN-T
33.88
-5.50
1.39
EXE-T
9.11
-4.70
5.22
POT-T
23.83
-3.90
2.35
MFC-T
21.55
-3.10
3.68
KEY-T
38.76
-3.10
4.08
CPG-T
14.68
-3.10
2.30
GWO-T
34.30
-3.00
4.13
OR-T
13.48
-2.90
1.21
IMO-T
43.63
-2.80
1.37
IFP-T
13.83
-2.60
WN-T
103.20
-2.40
1.69
D.UN-T
17.10
-1.80
8.80
Source: The Globe and Mail
Page 8
Tax-Loss Selling 2016
Figure 4: S&P/TSX 60 Index Performance Year-To-Date – Best to Worst (As of November 10, 2016)
C om pany
Teck Resources
First Quantum Minerals
Barrick Gold Corp.
Kinross Gold
EnCana Corp.
Yamana Gold Inc.
Silver Wheaton
Agnico Eagle Mines
Saputo Inc.
Franco-Nevada Corp.
Canadian Natural Resources
ARC Resources Ltd.
SNC-Lavalin Group
Bombardier Inc.
TransCanada Corp.
Pembina Pipeline Corp.
Bank of Nova Scotia
Dollarama Inc.
Goldcorp Inc.
Enbridge Inc.
Inter Pipeline
CGI Group
Restaurant Brands Intl.
National Bank of Canada
Suncor Energy
Fortis Inc.
Royal Bank of Canada
Shaw Communications
Constellation Software
Canadian Tire Corporation
TD Bank
TELUS Corp.
CIBC
BCE Inc.
Cenovus Energy
Canadian National Railway
Bank of Montreal
Alimentation Couche-Tard
Canadian Pacific Railway
Brookfield Asset Management
Rogers Communications
Sun Life Financial Inc.
Thomson Reuters
Emera Inc.
Metro Inc.
Eldorado Gold
Agrium
Power Corp of Canada
Husky Energy
Loblaw Companies
George Weston
Imperial Oil
Crescent Point Energy
Manulife Financial
Potash Corp. of Saskatchewan
Magna International
Gildan Activewear
BlackBerry Limited
Cameco Corp.
Valeant Pharmaceuticals Intl.
Sym bol Price ($ ) Y TD C hange (%)
TCK.B-T
29.90
459.40
FM-T
15.50
177.40
ABX-T
21.51
125.20
K-T
4.97
112.00
ECA-T
14.08
102.10
YRI-T
4.64
87.90
SLW-T
28.51
87.40
AEM-T
64.24
86.10
SAP-T
45.04
45.40
FNV-T
87.48
41.80
CNQ-T
41.52
39.20
ARX-T
22.70
37.40
SNC-T
56.91
34.30
BBD.B-T
1.87
33.60
TRP-T
60.30
32.70
PPL-T
38.98
31.10
BNS-T
71.00
28.00
DOL-T
100.49
26.00
G-T
19.16
25.80
ENB-T
56.96
23.80
IPL-T
26.86
21.30
GIB.A-T
65.04
21.00
QSR-T
60.58
19.50
NA-T
47.96
18.80
SU-T
40.14
14.10
FTS-T
41.47
13.80
RY-T
85.27
13.70
SJR.B-T
26.25
12.00
CSU-T
640.80
11.80
CTC.A-T
135.67
11.70
TD-T
61.57
11.70
T-T
42.05
11.30
CM-T
102.07
10.80
BCE-T
58.13
10.70
CVE-T
19.11
10.10
CNR-T
86.37
9.60
BMO-T
85.88
9.60
ATD.B-T
63.75
9.40
CP-T
196.48
8.70
BAM.A-T
45.74
8.60
RCI.B-T
51.00
8.40
SLF-T
50.20
7.40
TRI-T
56.13
6.60
EMA-T
45.11
6.20
MRU-T
40.31
6.10
ELD-T
4.08
2.90
AGU-T
132.72
2.90
POW-T
29.36
0.20
HSE-T
14.22
-0.70
L-T
64.11
-0.70
WN-T
103.20
-2.40
IMO-T
43.64
-2.80
CPG-T
14.82
-3.10
MFC-T
21.69
-3.10
POT-T
23.91
-3.90
MG-T
51.70
-9.30
GIL-T
34.13
-13.70
BB-T
9.52
-25.70
CCO-T
11.94
-33.00
VRX-T
21.79
-84.70
Source: The Globe and Mail
Page 9
Tax-Loss Selling 2016
Figure 5: Dow Jones Industrial Average – Best to Worst (As of November 10, 2016)
C om pany
Caterpillar Inc.
Merck & Company
UnitedHealth Group
Chevron Corp.
Johnson & Johnson
Wal-Mart
Cisco Systems
3M Co.
IBM Corp.
JP Morgan Chase & Co.
Exxon Mobil
United Technologies
AT&T Inc.
Microsoft
Procter & Gamble
Visa Inc.
Goldman Sachs
DuPont
Verizon Communications
Intel
Boeing Co.
Pfizer
American Express
Coca-Cola
McDonald's Corp.
Home Depot
General Electric
Travelers Companies
Walt Disney
Nike
Sym bol
Price (US$ ) Y TD C hange (%)
CAT-N (US$)
93.64
34.20
MRK-N (US$)
64.97
21.50
UNH-N (US$)
143.54
20.60
CVX-N (US$)
107.66
19.70
JNJ-N (US$)
119.64
17.10
WMT-N (US$)
71.34
16.00
CSCO-Q (US$)
31.14
15.50
MMM-N (US$)
172.17
13.10
IBM-N (US$)
159.95
12.50
JPM-N (US$)
75.60
10.90
XOM-N (US$)
87.48
10.60
UTX-N (US$)
107.01
9.10
T-N (US$)
36.94
8.80
MSFT-Q (US$)
58.50
8.50
PG-N (US$)
82.56
8.20
V-N (US$)
81.89
7.30
GS-N (US$)
197.32
6.90
DD-N (US$)
70.59
5.50
VZ-N (US$)
46.89
3.50
INTC-Q (US$)
34.59
0.90
BA-N (US$)
147.63
0.30
PFE-N (US$)
33.49
-0.50
AXP-N (US$)
69.73
-1.20
KO-N (US$)
41.07
-1.60
MCD-N (US$)
114.50
-2.70
HD-N (US$)
129.39
-4.70
GE-N (US$)
30.57
-4.90
TRV-N (US$)
108.02
-5.20
DIS-N (US$)
95.92
-9.90
NKE-N (US$)
50.97
-18.20
Source: The Globe and Mail
Page 10
Tax-Loss Selling 2016
Figure 6: S&P 500 Index - Best Performers Year-To-Date (As of November 10, 2016)
C om pany
NVIDIA Corp.
Newmont Mining
ONEOK, Inc.
Freeport-McMoRan Inc.
Spectra Energy
Martin Marietta Materials
Applied Materials
Cummins
Hewlett Packard Enterprise
Quanta Services
Urban Outfitters
Nabors Industries
Symantec Corp.
PVH Corp.
F5 Networks
Albemarle
Nucor Corp.
Kinder Morgan
Concho Resources
Pioneer Natural Resources
Denbury Resources
Linear Technology Corp.
Cimarex Energy
Halliburton Co.
Xylem Inc.
FMC Corp.
Vulcan Materials
Microchip Technology
Navient Corp.
Southwestern Energy
Devon Energy
Parker Hannifin
Qualcomm
Range Resources
Cooper Cos.
Ryder System
Ingersoll-Rand
Caterpillar Inc.
Time Warner Inc.
Charter Communications
Sysco Corp.
EOG Resources
Garmin Limited
HP Inc.
Comerica Inc.
Jacobs Engineering Group
Illinois Tool Works
Apache Corp.
Tyson Foods
Harley-Davidson
Sym bol
Price (US$ ) Y TD C hange (%) Dividend Y ield (%)
NVDA-Q (US$)
68.40
112.30
0.70
NEM-N (US$)
36.09
105.90
0.30
OKE-N (US$)
48.90
100.30
5.00
FCX-N (US$)
13.82
93.10
SE-N (US$)
41.33
71.90
3.90
MLM-N (US$)
230.44
65.00
0.80
AMAT-Q (US$)
28.49
56.00
1.40
CMI-N (US$)
138.39
55.50
3.00
HPE-N (US$)
23.22
52.80
1.00
PWR-N (US$)
31.04
51.60
URBN-Q (US$)
37.25
51.40
NBR-N (US$)
12.44
47.00
1.90
SYMC-Q (US$)
25.08
46.90
1.20
PVH-N (US$)
112.97
45.30
0.10
FFIV-Q (US$)
139.05
44.60
ALB-N (US$)
80.80
43.60
1.50
NUE-N (US$)
58.94
43.00
2.60
KMI-N (US$)
21.74
42.90
2.40
CXO-N (US$)
131.83
42.90
PXD-N (US$)
179.14
41.70
0.10
DNR-N (US$)
2.87
41.60
LLTC-Q (US$)
59.82
41.00
2.10
XEC-N (US$)
124.72
40.60
0.30
HAL-N (US$)
48.47
40.50
1.50
XYL-N (US$)
52.11
38.80
1.20
FMC-N (US$)
54.61
38.60
1.20
VMC-N (US$)
137.17
38.50
0.60
MCHP-Q (US$)
62.73
38.20
2.20
NAVI-Q (US$)
16.55
37.70
4.10
SWN-N (US$)
10.18
37.60
DVN-N (US$)
43.06
36.30
0.60
PH-N (US$)
136.27
36.10
1.90
QCOM-Q (US$)
66.46
35.80
3.10
RRC-N (US$)
32.90
35.60
0.20
COO-N (US$)
181.00
35.40
R-N (US$)
78.99
34.50
2.30
IR-N (US$)
75.39
34.30
2.20
CAT-N (US$)
93.61
34.20
3.40
TWX-N (US$)
86.08
33.90
1.90
CHTR-Q (US$)
271.73
33.20
SYY-N (US$)
53.38
32.10
2.30
EOG-N (US$)
93.10
32.00
0.70
GRMN-Q (US$)
49.82
31.70
4.20
HPQ-N (US$)
15.65
31.50
3.40
CMA-N (US$)
55.33
30.90
1.70
JEC-N (US$)
55.45
30.90
ITW-N (US$)
122.35
30.70
2.20
APA-N (US$)
57.99
30.50
1.70
TSN-N (US$)
66.86
30.40
0.90
HOG-N (US$)
59.70
29.50
2.40
Source: The Globe and Mail
Page 11
Tax-Loss Selling 2016
Figure 7: S&P 500 Index - Worst Performers Year-To-Date (As of November 10, 2016)
C om pany
Endo International plc
Noble Corp.
First Solar
Perrigo Company
Stericycle Inc.
TripAdvisor, Inc.
H&R Block
CF Industries
Alexion Pharmaceuticals
Allergan plc
Frontier Communications
Illumina Inc.
L Brands, Inc.
Autonation Inc.
McKesson Corp.
Pitney Bowes
Mylan N.V.
AmerisourceBergen
Vertex Pharmaceuticals
Alliance Data Systems
TEGNA Inc.
Delphi Automotive
Coty Inc.
Legg Mason
Chipotle Mexican Grill
Regeneron Pharmaceuticals
Kroger Co.
Gilead Sciences
Cardinal Health
Royal Caribbean Cruises
CVS Health Corp.
Tractor Supply
Under Armour
Borg Warner
Arconic Inc.
CBRE GROUP INC.
Tesoro Corp.
Nike
Bristol Myers Squibb
Centene Corporation
Ford Motor
Transocean Inc.
HCP Inc.
Hanesbrands
Macerich Co.
Lennar Corp.
Marathon Petroleum
Cerner Corp.
DaVita Inc.
Bed Bath & Beyond
Sym bol
Price (US$ ) Y TD C hange (%) Dividend Y ield (%)
ENDP-Q (US$)
17.31
-73.40
NE-N (US$)
4.97
-53.80
7.00
FSLR-Q (US$)
31.48
-51.40
PRGO-N (US$)
87.54
-42.30
0.70
SRCL-Q (US$)
75.85
-38.60
TRIP-Q (US$)
51.54
-38.30
HRB-N (US$)
21.87
-36.10
4.10
CF-N (US$)
27.01
-35.10
4.50
ALXN-Q (US$)
127.52
-33.30
AGN-N (US$)
216.65
-31.90
FTR-Q (US$)
3.19
-31.30
13.10
ILMN-Q (US$)
136.73
-30.60
LB-N (US$)
68.40
-30.60
3.60
AN-N (US$)
42.56
-30.40
MCK-N (US$)
147.04
-28.20
0.80
PBI-N (US$)
15.08
-28.00
5.10
MYL-Q (US$)
38.40
-28.00
ABC-N (US$)
80.20
-27.10
1.80
VRTX-Q (US$)
96.62
-26.20
ADS-N (US$)
206.93
-25.00
1.00
TGNA-N (US$)
19.90
-24.50
2.90
DLPH-N (US$)
66.57
-23.50
1.80
COTY-N (US$)
18.91
-23.30
1.40
LM-N (US$)
31.14
-23.20
0.53
CMG-N (US$)
392.00
-23.00
REGN-Q (US$)
425.74
-22.90
KR-N (US$)
33.36
-22.80
1.50
GILD-Q (US$)
77.84
-22.50
2.40
CAH-N (US$)
71.21
-22.40
2.60
RCL-N (US$)
81.47
-21.90
2.40
CVS-N (US$)
77.03
-21.70
2.20
TSCO-Q (US$)
67.89
-21.60
1.40
UA-N (US$)
31.54
-21.60
BWA-N (US$)
34.45
-21.30
1.50
ARNC-N (US$)
17.96
-21.20
2.10
CBG-N (US$)
27.80
-21.20
TSO-N (US$)
83.72
-21.00
2.60
NKE-N (US$)
50.95
-18.20
1.30
BMY-N (US$)
56.36
-18.20
2.70
CNC-N (US$)
55.62
-17.90
F-N (US$)
11.90
-17.80
5.20
RIG-N (US$)
10.45
-17.20
HCP-N (US$)
28.28
-17.20
5.10
HBI-N (US$)
24.60
-17.10
1.80
MAC-N (US$)
69.35
-16.10
4.20
LEN-N (US$)
41.06
-16.00
0.40
MPC-N (US$)
43.71
-16.00
3.30
CERN-Q (US$)
49.96
-15.60
DVA-N (US$)
59.70
-14.90
BBBY-Q (US$)
43.50
-14.70
1.20
Source: The Globe and Mail
Page 12
Tax-Loss Selling 2016
Tax-Loss Selling with ETFs
Exchange Traded Funds (ETFs) can offer several tax-loss selling benefits, with two standing out at the forefront. First, you can sell
an ETF that is in a loss position, crystalizing your capital loss, and replace it with an ETF that gives exposure to the same asset
class. That said, investors must use caution under this strategy as replacing an ETF with another that tracks the identical index
would result in a superficial loss, and the elimination of your capital loss tax benefit. For example, selling the iShares S&P/TSX
Capped Composite Index Fund (XIC), and replacing it with the BMO S&P/TSX Capped Composite Index ETF (ZCN) would result in a
superficial loss as the two replicate the same index. However, you could replace the iShares S&P/TSX Capped REIT Index Fund
(XRE) with the BMO Equal Weight REITs Index ETF (ZRE), as BMO’s fund tracks the Dow Jones Canada Select Equal Weight REIT
Index, as opposed to the iShares fund, which replicates the S&P/TSX Capped REIT Index.
A second strategy is to replace individual holdings that are in a loss position with an ETF that tracks that company’s sector. This
allows investor to retain their sector exposure while crystalizing a loss. Below we highlight the correlation between two of the
largest decliners in Canada, year-to-date, and their three-year correlation with the ETF that represents their sector.
Figure 8: MEG Energy Correlation with iShares S&P/TSX Capped Energy Index Fund (XEG) as of November 10, 2016.
Company
MEG Energy
Symbol
MEG-T
Price ($)
5.43
YTD Change (%)
-32.30
Correlation with XEG
0.77
Figure 9: BlackBerry Correlation with iShares S&P/TSX Capped Information Technology Index ETF (XIT) as of November 10, 2016.
Company
BlackBerry Limited
Symbol
BB-T
Price ($)
9.53
YTD Change (%)
-25.78
Correlation with XIT
0.68
Source: The Globe and Mail
Page 13
Tax-Loss Selling 2016
Upgrade Your Holdings
One lesson learned during the 2008/09 financial crisis was that the biggest decliners aren’t necessarily the biggest gainers
during a market recovery. Tax-loss selling can create an opportunity to diversify when needed or to upgrade the quality of your
stocks. Below we offer some suggested upgrades for tax-loss selling candidates.
C om pany
Sym bol Y TD C hange (%)
Concordia International
CXR-T
-94.57
Valeant International
VRX-T
-83.90
Sw itch Idea
Sym bol
CRH Medical
Patient Home Monitoring
PHM-V
-77.92
Prometic Life Sciences
PLI-T
-19.35
Under Armour
UA-N
-21.30
Nike
NKE-N
-19.00
Hudson Bay
HBC-T
-8.06
Rate-reset Preferred Shares
N/A
DHX Media
DHX.B
N/A
Amazon
IMAX-X
AMZN-US
Canadian Investment Grade Preferred Share Fund
Dec. IPO
(Purpose Investments)
-21.50
Cineplex
IMAX Corp
CRH-T/
CRHM-US
-9.40
CGX-T
W hy?
CG Heathcare Services Analyst Richard
Close remains bullish on CRHM and
has an upward bias to estimates given
strong FCF generation, positive
commentary on pipeline, and optimism
in deploying close to ~$60M in M&A
by end of 2017. Furthermore,
development of a de novo growth story
could justify multiple expansion. PT
US$5.50
CG Tech Analyst Michael Graham sees
no abatement in Amazon's operating
strength. In particular, AWS revenue
grew 55% y/y with expanding margins.
With the core eCommerce business
performing well and AWS growth and
profitability holding up nicely, he
continues to stand by our investment
thesis of core eCommerce growth and
continued share gains. PT $900
Diversify your pref holdings, enhance
liquidity, and bring in an expert
manager to help enhance your
risk/return profile.
CG Teleccomications & Media Analyst
Aravinda Galappatthige says while Q4
is expected to be down due to the
tough base last year, he sees a bright
outlook for Cineplex as we look to
2017. He recently upgraded the stock
to a BUY following nearly 18 months as
a HOLD. Sees a healthy 2017 film slate
and improving fundementals. PT $55
Source: The Globe and Mail, Canaccord Genuity
This publication is a general market commentary and does not constitute a research report. Any reference to a research report or a
recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This commentary is for
informational purposes only and does not contain investment advice and does not consider any provisions related to investment suitability and risk.
This publication may be wholly or partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment
advice. Not intended for distribution within the United States. Canaccord Genuity Wealth Management is a division of Canaccord Genuity Corp.
Member – Canadian Investor Protection Fund.
Page 14
Tax-Loss Selling 2016
Page 15
Tax-Loss Selling 2016