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Canadian Fund Managers Favor AI Enablers, Not Just Hype

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  Published in Stocks and Investing on Friday, January 2nd 2026 at 16:34 GMT by The Globe and Mail

Canadian Fund Managers Look to AI, Energy Transition, and Resilience in 2026: A Portfolio Preview

As the year draws to a close, investors are naturally looking ahead – pondering economic forecasts, potential market shifts, and, crucially, which companies stand poised for growth. The Globe & Mail recently compiled insights from several prominent Canadian fund managers, revealing their top stock picks and investment strategies heading into 2026. The overarching theme isn't a dramatic overhaul of portfolios but rather a nuanced recalibration focused on artificial intelligence (AI), the ongoing energy transition, and companies demonstrating resilience in an uncertain economic landscape.

A Focus on AI – Beyond the Hype

Unsurprisingly, AI is dominating investment conversations, and Canadian fund managers are no exception. However, the approach isn't simply chasing the latest meme stock. Instead, they’re seeking companies that are enablers of AI rather than solely reliant on its immediate consumer adoption. This distinction is crucial given the current valuation levels in many AI-related stocks.

Several managers highlighted Constellation Software (CSU) as a key holding. While not an immediately obvious AI play, Constellation’s strategy of acquiring and optimizing niche software businesses positions it well to integrate AI solutions across its portfolio, boosting efficiency and creating new revenue streams. As the article points out, CSU's decentralized management structure allows for rapid adaptation and innovation – vital in a rapidly evolving technological landscape. This aligns with their broader investment philosophy of finding companies that can compound value over time, regardless of short-term market fluctuations (a strategy often associated with legendary investor Warren Buffett).

Another AI-adjacent pick frequently mentioned was Shopify (SHOP). While Shopify has faced challenges recently, managers believe the company's commitment to integrating AI into its e-commerce platform – particularly for small and medium-sized businesses – represents a significant growth opportunity. The ability of AI to personalize shopping experiences, automate marketing tasks, and streamline operations could be transformative for these businesses, driving increased adoption of Shopify’s services. The article references Shopify's recent announcements regarding AI-powered tools like "Sidekick," which aims to provide merchants with personalized assistance and insights.

Energy Transition: Beyond Renewables – A Broader Perspective

The energy transition remains a significant long-term investment theme, but managers are moving beyond the simplistic narrative of solely investing in renewable energy sources. They recognize that the shift requires a complex interplay of technologies, including carbon capture, hydrogen production, and critical mineral extraction.

Nutrien (NTR), the world’s largest potash producer, emerged as a surprising yet compelling pick. Potash is a key ingredient in fertilizers, essential for boosting crop yields to feed a growing global population – a factor that will become increasingly important as climate change impacts agricultural production. Furthermore, Nutrien's involvement in carbon capture and sequestration projects positions it favorably within the broader energy transition narrative. The article notes that demand for potash is expected to remain robust, supporting Nutrien’s profitability.

Similarly, managers are recognizing the importance of critical minerals – lithium, cobalt, nickel – which are essential components in electric vehicle batteries and other clean technologies. While direct investment in mining companies carries inherent risks, exposure to this sector through diversified funds or companies involved in processing and refining these materials is seen as a worthwhile opportunity.

Resilience and Value: Navigating Economic Uncertainty

Beyond specific sectors, fund managers emphasized the importance of investing in companies demonstrating financial resilience and offering compelling value. This includes businesses with strong balance sheets, consistent cash flow generation, and defensible market positions.

Brookfield Infrastructure Partners (BIP.UN) consistently appeared on several lists. This company owns a diverse portfolio of essential infrastructure assets – pipelines, toll roads, utilities – that generate stable revenue streams regardless of economic conditions. The article highlights the inherent stability of these assets and Brookfield’s expertise in managing complex infrastructure projects.

Canadian National Railway (CNR) also received attention for its crucial role in transporting goods across Canada and into the United States. The company's strong pricing power, efficient operations, and essential service make it a relatively safe haven during periods of economic uncertainty. The article notes that CNR’s ability to adapt to changing trade patterns and invest in infrastructure upgrades will be key to its long-term success.

Key Takeaways & Cautions

• Diversification Remains Key: While these picks represent areas of conviction, fund managers consistently stressed the importance of diversification across asset classes and sectors.
• Valuation Matters: The AI boom has inflated valuations in many companies. Managers are prioritizing quality over hype and seeking opportunities where fundamentals justify prices.
• Long-Term Perspective: These investments are generally viewed as long-term holdings, requiring patience and a willingness to weather short-term market volatility.
• Economic Uncertainty Persists: While the outlook for 2026 is cautiously optimistic, risks remain – including inflation, interest rate hikes, and geopolitical instability.

The Globe & Mail’s compilation provides valuable insights into the thinking of Canadian fund managers as they navigate a complex investment landscape. While not offering guarantees of future performance, these picks highlight key themes – AI enablement, energy transition complexities, and resilience – that are likely to shape market dynamics in the years ahead. Investors considering incorporating any of these suggestions should conduct their own thorough due diligence and consult with a financial advisor before making any decisions.

I hope this article provides a comprehensive summary of the Globe & Mail piece! Let me know if you'd like any adjustments or further elaboration on specific points.