Canadian retirement savers are searching for stocks that will provide international exposure in their self-directed RRSPs.
One strategy involves buying Canadian companies that have a significant presence around the globe. This helps reduce country-specific risks that could arise through direct ownership of local stocks.
Let’s take a look at three companies that might be interesting picks for your portfolio right now.
Bank of Nova Scotia (TSX: BNS)(NYSE: BNS)
Several large acquisitions made in the past year are keeping Bank of Nova Scotia’s management team busy, and investors are waiting to see if the company can deliver the integration benefits that are expected.
Based on the success of previous deals, the outlook should be positive.
Bank of Nova Scotia has invested billions of dollars to build a presence in Latin America, with a specific focus on the Pacific Alliance countries that include Mexico, Peru, Chile, and Colombia. The total population is roughly seven times that of Canada.
The middle class is expanding in this region, and Bank of Nova Scotia is benefiting from rising demand for loans and investment products. The International Banking division contributes about 30% of the company’s profits and generated a 16% year-over-year gain in adjusted net income in fiscal 2018.
Bank of Nova Scotia has a strong track record of dividend growth and currently appears oversold, even after the stock’s recent recovery off the 2018 lows.
Investors who buy the stock today can pick up a yield of 4.6%.
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM)
Brookfield Asset Management has 100 offices in more than 30 countries. The company bills itself as a global alternative asset manager, with investments in renewable power, infrastructure, and real estate.
Essentially, investors get an opportunity to own assets that would otherwise be completely out of reach, including some of the top office buildings in major cities.
Brookfield Asset Management has been around for more than a century and possesses the financial capabilities and global scale to get a leap on competitors when attractive opportunities arise.
The stock is up 10% since December 24 but still sits below the 12-month high. If you are looking for a buy-and-hold pick to sit on for decades, Brookfield Asset Management should be on your radar.
Sun Life Financial (TSX: SLF)(NYSE: SLF)
Sun Life is an attractive stock for investors who want to get exposure to Asia. The company has established subsidiaries or partnerships in a number of key markets in the region, including India, China, the Philippines, Vietnam, and Indonesia.
The massive population base in these countries provides significant insurance and wealth management opportunities over the coming decades.
Sun Life has recovered from the pains of the Great Recession, and management has taken important steps to remove risk from the business. Another meltdown in global financial markets would be negative, but Sun Life is better prepared to weather the storm.
Dividend growth has returned and the stock looks cheap right now. The current distribution provides a yield of 4%.
The bottom line
Bank of Nova Scotia, Brookfield Asset Management, and Sun Life should be strong buy-and-hold picks for a balanced RRSP portfolio.
