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Highlights
RBC Capital Markets updates its domestic equity top 40 list with four stock changes
Iamgold Corp. and Aecon Group Inc. are added to the list; Cenovus Energy Inc. and OceanaGold Corp. are removed
Industrials and Utilities supported broader portfolio strength in line with S&P/TSX Composite Index
A recent update to RBC Capital Markets’ quantitatively-driven top 40 domestic equity list has introduced changes within companies traded on the S&P/TSX Composite Index and the TSX Smallcap Index, aligning with sector-wide strength across Canadian equities. The adjustment adds Iamgold Corp. (TSE:IMG) and Aecon Group Inc. (TSE:ARE), while removing Cenovus Energy Inc. (TSE:CVE) and OceanaGold Corp. (TSE:OGC).
New Entrants to the Top 40
Iamgold Corp. (TSE:IMG), which trades on the TSX Smallcap Index, operates within the gold mining sector. It replaces OceanaGold Corp. (TSE:OGC), another player in the precious metals segment, suggesting a rebalancing within the mining space. Aecon Group Inc. (TSE:ARE), part of the S&P/TSX Composite Index, enters the list from the industrials sector. Its inclusion reflects broader momentum in industrial equities, which recently outpaced other segments in monthly returns.
Companies Removed from the Portfolio
Cenovus Energy Inc. (TSE:CVE), a prominent name in the energy sector and a component of the S&P/TSX 60, exits the list. Its removal, alongside OceanaGold, signals a recalibration in the list’s exposure to energy and mining. This shift does not reflect a wholesale sector downgrade but may align with underlying quantitative thresholds or relative performance metrics.
Performance Drivers Behind the List
The top 40 domestic stock picks list showed broader gains in the recent period, with all sectors except information technology contributing positively. Notably, industrials and utilities provided leading support, highlighting the strength of companies such as Toromont Industries Ltd. (TSE:TIH), Finning International Inc. (TSE:FTT), and Fairfax Financial Holdings Ltd. (TSE:FFH), all of which remain on the list. These sectors, part of the S&P/TSX Composite Index, showed consistent upward momentum.
List Composition Across Financials and Energy
Financial firms continue to hold significant weight in the portfolio. This includes Bank of Nova Scotia (TSE:BNS), Great-West Lifeco Inc. (TSE:GWO), iA Financial Corporation Inc. (TSE:IAG), and Equitable Group Inc. (TSE:EQB), all constituents of the S&P/TSX Composite Index or TSX Composite Dividend Index. Similarly, energy companies such as Canadian Natural Resources Ltd. (TSE:CNQ), Suncor Energy Inc. (TSE:SU), and Imperial Oil Ltd. (TSE:IMO) remain represented, despite the removal of Cenovus.
Diverse Exposure Across Market Segments
The revised list continues to balance exposure across various market capitalizations and sectors. Smaller-cap stocks such as Silvercorp Metals Inc. (TSE:SVM) and Cascades Inc. (TSE:CAS), likely drawn from the TSX Completion Index or TSX Smallcap Index, are included alongside larger firms from the S&P/TSX 60. The composition reflects both quantitative criteria and broad sector alignment within the Canadian market.
Market Sentiment and Institutional Positioning
In a broader context, market sentiment remains measured. Recent commentary from market professionals indicates that institutional positioning across equities is at moderate levels. Passive flows from corporate actions and retail savings mechanisms continue to drive incremental momentum in Canadian equities, even as larger institutions reassess allocation within high-performing segments. This environment has contributed to rebalancing within top equity portfolios and supports strategic list modifications such as those recently made by RBC Capital Markets.
