CIBC NotesEvent: The U.S. dollar has appreciated approximately 4% vis--vis the Canadian dollar over the past month and appears to be retesting highs achieved in October 2022.
Our Take: Many of the companies in our coverage universe have some degree of exposure to the U.S. dollar. For the asset managers, a strengthening U.S. dollar
is a tailwind from an AUM perspective (or at least a mitigant to market volatility). The asset managers that disclose their AUM breakdown by currency include CI
Financial (CIX.TSX, Outperformer) at 44% in USD, IGM Financial (IGM.TSX, Outperformer) at 32% and Fiera Capital (FSZ.TSX, Neutral) at 21%. The vast
majority of CI’s wealth platform is also USD-denominated which has favourable implications from a translation standpoint. Other companies that come to mind
include those which report in USD but are predominantly traded in CAD, including ECN Capital (ECN.TSX, Outperformer), Onex (ONEX.TSX, Neutral), and
Fairfax Financial (FFH.TSX, Outperformer). A few other names that stand to benefit from a rising U.S. dollar include Alaris Equity Partners (AD.UN.TSX,
Outperformer) where the majority of investments are USD-denominated but the company reports in CAD, as well as Trisura Group (TSU.TSX, Outperformer)
where the translation impact has favourable implications for book value and earnings when converted.