RE:RE:RE:RE:RE:Frontier Lithium/ JV StocksAs much as I would LOVE to see an influx of capital into FL and peers, I’m not a big fan of artificial fixes like forcing pension funds to invest in an inordinate amount of Canadian positions. At 25% they are already over-invested in a country that represents between 2% and 3% of global investment opportunities. As well, the Canadian market is very narrow with limited exposure to significant industry sectors, which would result in lower risk-mitigating diversification opportunities.
RRSPs limited foreign exposure to 10% for a very long time, later bumping it to 20% and 30% before ending that limitation in 2005. I believe it was found that the Canadian marketplace didn’t suffer at all once those constraints were removed, though it’s highly likely that pension funds returns did suffer somewhat from a lack of investment opportunities over the years.
I try to keep in mind that these pension funds are extremely important to all of us and I don’t want people messing around with their mandate… which is to ensure the hard-working people that contribute to them enjoy the best risk-adjusted returns and retirement income streams possible.
Again, I’d love to see someone force investment our way but I don’t believe it would be a net positive for Canada.
My two cents... Or 1.5 cents USD