Bruce Sansom, President and CIO, Global Wealth Builders

Firm: Global Wealth Builders
Position: President and CIO
Years in wealth management: 64
Years as a portfolio manager: 42

Bruce Samson started his investment career in 1954, so there isn't much that surprises him when it comes to the markets. Whether it's Black Friday, the dot-com crash or the financial crisis, Sansom has seen it all in his four decades as a portfolio manager. Even after all this time, the job still excites him, which is why he lends his expertise to the team at Global Wealth Builders in the science of portfolio construction. And when it comes to that task, he believes greater transparency is needed so PMs can make the right calls.

My biggest frustration is the difficulty of obtaining honest and accurate economic data that is not massaged for political purposes,” Sansom says. “It’s a mystery how the nation can advertise 4.6% unemployment but 40% of the labour force is on food stamps. The reported inflation measure is manipulated to understate the actual number. Corporate earnings reports are massaged and adjusted in ways to overstate results. There is too much dishonesty.”

Another frustration for Sansom is the fact that the Canadian economy is too concentrated in only a few sectors. As a PM, he always strives for greater diversification, but that can’t be achieved with any hint of home bias. 

“Canadian investors are forced to invest internationally to achieve broad diversification,” he says. “Our market is basically financials and resources, which require robust international economic conditions. Such conditions do not exist.”

While investing in the Canadian market has its pitfalls, that doesn’t mean Sansom is directing his clients toward less developed nations in search of higher returns.

“Investing in emerging markets is riskier and expensive to manage, which dictates reduced exposure,” he says. “These factors reduce both the appeal and opportunity for a meaningful contribution to returns.” 

Having spent time on the trading floor of the Toronto Stock Exchange, Sansom founded Edmonton’s first investment management firm, Managed Investments, in 1976. The business proved highly successful, amassing nearly $1 billion in AUM by the time it was sold in 1995.

Global Wealth Builders was Sansom’s next venture, started in 2002 and still going strong today. While some investors might question the value of active management now that passive options have proliferated, it’s not a strategy Sansom would prescribe.

"Some clients moved to managers who employ ETFs rather than stock-picking," he says. "I believe the increased votality is a gift to achieve managers. Thisis why we exist. ETF investing is like handing the steering wheel to a novice driver and hoping he misses the potholes."

Earlier in his career, Sansom specialized in bond trading, so he’s no stranger to the fixedincome space and the challenges it presents today. When Sansom started his journey in wealth management back in 1954, the prime rate in Canada was 4.5%, which seems high by today’s standards, but tell that to an investor in 1981 who was dealing with a rate of 19%. Today the rate is 3.45%, and it’s expected to rise again this year, but it’s what’s happening in the bond markets outside of Canada that gives Sansom the most cause for concern.

“The 60-40 split is only outdated due to the low level of interest rates,” he says. “Central bank efforts to normalize rates are an important factor, which we expect to cause catastrophic losses in bond portfolios. This risk is particularly acute in the $10 trillion+ of negative-yielding bonds in Europe and Asia."