Cardinal Update – March 2021

THE BANKING BOUNCE-BACK – Since the first vaccination approval was announced by Pfizer-BioNTech on November 9, 2020, the Canadian banks and U.S. banks held in the Cardinal portfolios have tracked an average return of ~27% and ~50% as compared to the total returns of the S&P/TSX at ~12% and the S&P500 at only ~8%. 

What has led to the banks’ comeback and what drivers keep us confident in the space? The most apparent driver of the strong returns from the sector is the vaccination news itself which signals a hopeful beginning of the end to the current COVID-19 health crisis. With an end to the pandemic comes expectations of renewed economic growth of which banks are historically strong participants in the early cycle recovery through lending growth and capital markets activity.

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