Canadian investors have a range of options to consider in the financials arena – whether it is one of the “Big 6” banks, to a smaller regional lender, to a higher risk alternative lender, investors have a range of options in various risk categories to choose from.
One bank I believe to hold the best risk/reward relationship given the current macroeconomic environment we find ourselves in is Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD Bank competes on a broader global scale when compared to its Big 6 Canadian counterparts, having a significant presence in the U.S. market, much more so than its competition.
The lender is expected to benefit the most from taxation changes in the U.S. under President Trump, and is likely to experience a significant bottom line boost in the years to come as U.S. lending continues to expand and the global economy continues to improve.
Rising interest rates have also helped TD boost its mortgage rates in recent weeks, and while other Canadian banks have followed suit, the ability of TD to generate a significant lending spread is another key driver I believe will take TD higher than its peers in the long-term.
From a diversification standpoint to a tailwind play (given recent U.S. tax reform), investors looking to load up on Canadian financials ought to consider TD as a primary option as a way to play broader global growth without the currency exchange risk other securities may provide.
Invest wisely, my friends.
