Jonathan Veale of De Luca Veale Investment Counsel is part of Wealth Professional Canada' Outstanding Portfolio Managers 2018
Firm: De Luca Veale Investment Counsel
Position: Founder, portfolio manager, compliance officer
Years in wealth management: 24
Years as a portfolio manager: 15
Before he decided to open his own firm, Jonathan Veale had already learned the ropes with some of the biggest investment names in Canada. Beginning his career as an advisor with ScotiaMcLeod in 1993, he moved to CIBC Wood Gundy in 1997, where he spent nine years. His partnership with Richard DeLuca followed, and in 2006, DeLuca Veale Investment Counsel was born. Aside from his responsibilities as portfolio manager and co-owner, Veale also serves as the firm’s compliance officer, a task that is increasingly important in today’s regulatory environment.
“While we understand the need for an effective regulatory environment, the level of regulation is a great burden on a small firm,” he says. “This leads to fewer small firms and less competition. Application of regulations is also uneven, which leads to consumers getting incomplete or misleading information."
DeLuca Veale Investment Counsel, therefore, prides itself on providing its clients with all the information they need to prepare for the future. At the moment, the equity markets aren’t the sure bet they have been for much of the last decade, but that’s where expert discretionary management really proves its worth.
“We don’t view recent market activities as a shock, per se,” Veale says. “For portfolio managers, market volatility presents opportunities. Have we changed our investment strategy? No, but our portfolio certainly changes as we capitalize on these opportunities.”
Fixed income is another area where portfolio managers might have updated strategy over the past year as interest rates have increased. Many believe more hikes are on the way from the BoC this year, but that’s far from guaranteed, Veale says.
“I’m not sure we’re in a rising-rate environment – rates certainly have risen, but the future is far from clear on that front,” he says. “We have recently made some minor changes, but our fixed-income strategy is largely driven by capital preservation motivations, so we’re pretty conservative. We’re not willing to take any major position or strategy risks in order to capture a minor increase in rates.”
“We have done very well for our clients, both lately and in the long term, by investing in top global brands ... While Canada is a great place to live, it does not present well globally as a great place to invest”
Something else Veale's clients can expect is investment strategy that reaches outside domestic boundaries. Canada is a minor player when it comes to global assets, and this is reflected in Veale’s portfolios.
“Sadly, we have not historically been large investors in the Canadian equity markets,” he says. “We have done very well for our clients, both lately and in the long term, by investing in top global brands. The reasons are varied, but suffice it to say that while Canada is a great place to live, it does not present well globally as a great place to invest.”
In constructing portfolios, Veale handpicks stocks and bonds, tailoring each portfolio to the specific client. While there has never been more choice in terms of different investment vehicles, that doesn’t mean traditional approaches won’t work in 2018.
“The 60-40 split is synonymous with a balanced approach, and it’s not a given that it is outdated,” he says. “If that’s what’s appropriate for a client given their specific circumstances, then that’s what their portfolio will reflect.”
Veale uses a “pension mentality” with his portfolios, relying on various asset classes. “Several years ago, we introduced direct investment in institutional-quality real estate into our clients’ portfolios when appropriate,” he says. “This assists in the portfolio management process of wealth growth, preservation and income production.”
