RBC Shifts Canadian Equity Portfolio Towards BCE, Gold and Industrials

RBC Capital Markets has made significant adjustments to its Canadian equity portfolio, swapping BCE for Telus and increasing its exposure to gold and industrial stocks. The changes, announced on March 3, 2026, reflect a strategic tilt towards sectors expected to perform well in the evolving economic landscape.

BCE Added, Telus Removed

RBC added BCE (BCE.TO, BCE) to its model Canadian equity portfolio, citing an “attractive and timely entry point” based on expectations for revenue and earnings growth beginning in 2026. Analysts point to improving wireless pricing in Canada and increased visibility from management’s multi-year outlook as key factors driving this decision. Conversely, Telus (TU, T.TO) was removed from the portfolio due to its “premium valuation,” which RBC believes requires a “higher performance bar” in a low-growth environment.

Increased Focus on Gold and Industrials

The portfolio adjustments extend beyond the telecom sector. RBC increased its exposure to materials, particularly gold and royalty companies, adding stakes in Wheaton Precious Metals (WPM, WPM.TO), Franco-Nevada (FNV, FNV.TO), IAMGOLD (IAG, IMG.TO), and OR Royalties (OR, OR.TO). The allocation to industrial stocks was also raised to 14%, exceeding its weight in the S&P/TSX Composite Index, with a new one percent weighting in Chorus Aviation (CHR.TO) due to its “compelling” capital allocation plan.

Financials Remain Core Holding

Financials continue to represent the largest sector weighting in the portfolio, accounting for 30% of holdings, roughly in line with the benchmark. RBC increased its positions in Toronto-Dominion Bank (TD, TD.TO), EQB (EQB.TO), and Fairfax Financial Holdings (FFH.TO), identifying Fairfax as a “top value pick.” National Bank of Canada (NA.TO) and Sun Life Financial were removed from the portfolio.

Technology Exposure Reduced

RBC reduced its exposure to technology stocks, decreasing the sector’s weighting from 12% to 9%. This involved trimming stakes in Shopify (SHOP, SHOP.TO) and Constellation Software (CSU.TO), as well as removing Lumine Group.

Portfolio Performance and Market Context

In the previous quarter, the Canadian Fundamental Equity Weighting (FEW) Portfolio returned 6.4%, trailing the S&P/TSX Index’s 10.1% return. RBC attributes this underperformance to being underweight in the materials sector, which experienced strong gains, and overweight in information technology, which declined during the period. However, the strategy has historically outperformed, generating an annualized return of 11.2% since 1986, compared to the index’s 9.1% gain.

The portfolio shifts occur as materials now comprise over one-fifth of the S&P/TSX Composite Index, a significant increase from late last year. Energy and consumer discretionary stocks remain underweight in the RBC portfolio.