Why this $1-billion money manager's faith in Nvidia remains intact
Money manager Greg Newman was optimistic about the markets when U.S. President Donald Trump was elected in November, but became more defensive when tariff talk started dominating headlines earlier this year.
By the time Trump's 'Liberation Day' hit on April 2, Mr. Newman's portfolios had shifted to 55 to 60 per cent equities, down from 70 per cent at the start of the year. The remainder was in fixed income, including bonds and cash.
'I didn't think [Mr. Trump] would be as draconian with his tariffs as he started off being, so I was glad we were hedging,' says Mr. Newman, senior wealth advisor and portfolio manager with the Newman Group at Scotia Wealth Management in Toronto, who oversees about $1-billion in assets.
Mr. Newman says he began to increase his equity holdings to about 65 per cent in recent weeks as the tariff rates eased, and he believes the markets could continue to recover later this year.
'We're still cautious,' he says. 'But I believe the outlook looks good over the next 18 months with deregulation and tax cuts [in the U.S., and] hopefully some tariff resolution.'
His average portfolio was up 10.5 per cent over the past 12 months, as of May 12, and has seen an annualized return of 14.9 per cent over the past three years. The performance is based on total returns, net of fees. Asset allocation varies depending on a client's risk tolerance.
The Globe spoke with Mr. Newman recently about what he's been buying and selling:
Name three stocks you own today and why.
Nvidia Corp. NVDA-Q, is a stock we started buying in 2019 at an average cost of US$11 a share, so we've done well. We trimmed some of it earlier this year when the DeepSeek news [about the competing Chinese AI company] came out. I thought maybe that was the game changer for Nvidia. After all, these are cyclical stocks; we don't want to own them forever. There is a time to part ways with them.
However, once we started to see Nvidia's earnings reports and comments from [chief executive officer] Jensen Huang that DeepSeek helps Nvidia's long-term thesis, we started to nibble on more at the end of March. Turns out we were too soon, as the stock fell again, but we added more in April and again in early May, and it has recovered. From a risk-reward perspective, we think Nvidia has much more room to go due to the thirst for data and the build-out of AI.
AltaGas Ltd. ALA-T, [the Calgary-based energy infrastructure company], is a stock we originally started buying in 2021 at around $20 a share. We've been adding steadily since, including in April and May, in the $35 to $37 range.
The company has quality assets with many catalysts for growth related to natural gas getting offshore as the Trans Mountain expansion project ramps up. Its midstream business also benefits from tariffs as producers look to export offshore. We also see growth in the powering of data centres. The company has a solid balance sheet and pays a nice dividend that's expected to grow.
Propel Holdings Inc. PRL-T, [a lending company under the MoneyKey, CreditFresh and Fora Credit brands] is a stock we started buying in 2024 around $24 a share and added to in recent weeks between $28 and $32. It's a subprime lender in the U.S., Canada and the U.K. About 90 per cent of its business is in the U.S.
The Goldilocks scenario for subprime lenders like this one is where you have rising uncertainty and the economy weakens only marginally – and that's what we're seeing today. Propel just reported first-quarter earnings and beat nicely. You don't necessarily want to buy this if you think a recession is going to happen, but we think, at this point, there's a good chance that it won't in the U.S.
We see a lot of growth for this business. It's a disruptive space where people can get loans they can't get through the bank.
Name a stock you sold recently.
Intact Financial Corp. IFC-T, the Canadian property and casualty insurance company, is a stock we've owned for about 15 years. We started buying it in the $50 a share range back then. I still like the company, but started to trim our position around $300 in March and April. It was getting more expensive on a price-to-growth basis. I also felt that investors were really crowding into perceived tariff-resilient plays like this at the time. I felt like it was getting over its skis.
We trimmed about a quarter of our position. If the stock gets down to $260 or $270, we would consider buying more.
This interview has been edited and condensed.
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