Canadians are using RRSP contributions to reduce their current tax bills and set some cash aside for the golden years.
One popular strategy involves owning a balanced portfolio of stocks that provides exposure to growth opportunities around the world. Owning local shares of companies in international markets can be both risky and difficult for retail investors, but there are Canadian businesses that have significant international operations and can provide investors with the desired diversification.
Let’s take a look at three stocks that might be interesting picks for a self-directed RRSP today.
Bank of Nova Scotia (TSX: BNS)(NYSE: BNS)
Bank of Nova Scotia is Canada’s third-largest bank and has a substantial international presence with most of the foreign operations located in Mexico, Colombia, Peru, and Chile. These four countries are home to more than 200 million people and form the core members of the Pacific Alliance trade bloc.
Bank of Nova Scotia continues to build its market share through strategic acquisitions and is well positioned in the region to capitalize on growing demand for loans and investment products as the middle class expands.
The international division was the strongest performer in Bank of Nova Scotia’s latest earnings report and contributes more than 30% of the bank’s total profits.
The stock appears cheap today and offers a solid 4.7% dividend yield.
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM)
Brookfield Asset Management owns a global portfolio of real estate, infrastructure, and renewable energy assets. Investors who dream of owning office properties and hospitality businesses in top cities around the world can get this exposure through the stock. Brookfield Asset Management has the size, contacts, and expertise to find and fund strategic opportunities that wouldn’t be feasible for smaller players.
Sun Life Financial (TSX: SLF)(NYSE: SLF)
Sun Life owns insurance, asset management, and wealth management businesses in Canada, the United States, the U.K., and Asia.
The Asian operations offer the best growth opportunity in the coming decades and Sun Life already has well established subsidiaries or partnerships in a number of key markets, including India, China, Indonesia, Vietnam, and the Philippines.
The company removed market risk from the business in the wake of the Great Recession and has returned to steady dividend growth. The current payout provides a yield of 3.8%.
The bottom line
Bank of Nova Scotia, Brookfield Asset Management, and Sun Life are all top-quality companies with growing international businesses. An equal investment in all three would provide RRSP investors with a good base to build a diversified portfolio.
