For Canadian investors, the case for investing closer to home can seem increasingly compelling.
Tariffs are reshaping trade relationships, geopolitical tensions are challenging long-standing alliances and companies are reconsidering where they manufacture, source and invest¹.
Taking a more regionalized approach to investment decisions may feel like a reasonable response to a world that is becoming less predictable and more turbulent².
Some investors are asking whether they should reduce their exposure to U.S. equities because of tariffs, political developments or concerns about the direction of the American economy. Others are rethinking their geographic allocations more broadly, questioning whether their portfolios should better reflect a changing global landscape.
But there’s a difference between recognizing that the global economic landscape is changing and allowing political headlines to determine how your portfolio is invested. “We’ve seen a shift with many clients on how they think they need to be invested,” says Ian Lusher, Partner and Portfolio Manager at Genus. “From the investment side, we don’t see it the same way. Clients are reading press clippings and hearing sound bites about political strategies, but they’re not looking at the economics.”
Lusher says investors often overlook a more fundamental question: where are the strongest opportunities for growth, and what risks come with them?
The key for investors is understanding what today’s global changes mean for the companies and assets they own – and how to ensure their portfolio genuinely aligns with their goals and values.
Values-based investing isn’t defined by geography
For investors who want their portfolios to reflect their values, geography can seem like a natural place to draw the line. But at Genus, values-based investing focuses on what a company does and how it performs – not simply where it’s headquartered.
One reason geographic investing can be misleading is that a company’s headquarters tells you surprisingly little about the full scope of its business. For example, a Canadian mining company may be headquartered here but operate mines around the world. Similarly, Canada’s major banks have substantial operations in the U.S. “Many Canadian companies on the equity market are global,” Lusher says. “They’re just domiciled in Canada.”
The opposite is also true: many U.S.-headquartered companies such as Apple and Google have global customers, operations and supply chains – and generate revenue around the world.
Lusher argues that a more relevant question is what a company does, rather than simply where it’s headquartered. “Fossil-free and values-based investing doesn’t really have anything to do with geography,” he says. “It has more to do with the metrics of the companies we invest in – and what they do.”
That can mean looking beyond Canada to find companies developing innovative solutions in areas such as climate adaptation, the energy transition and other emerging fields. “If a really good company that is doing something cutting edge and innovative happens to be in a country you wouldn’t normally invest in, that doesn’t matter,” Lusher says. “The company is just domiciled there.”
When geographic preferences become portfolio risks
Deciding you don’t want to own a particular company is one thing. But deciding you don’t want to invest in an entire country is another – and it comes with risks.
For Canadian investors, the U.S. is a particularly poignant example³. Excluding U.S.-domiciled companies can significantly reduce exposure to a large portion of the global equity market, including many of the companies leading developments in technology and artificial intelligence. “A lot of innovation comes out of technology,” Lusher says. “So if you say, ‘I’m not going to invest in that because it’s in the U.S.,’ that’s just hurting yourself.”
This is where personal preferences can collide with portfolio construction. Genus works with clients who have specific investment restrictions, such as divesting of global conflict or sovereign debt, but Lusher says there is a point where an exclusion can materially change the risk of a portfolio. “We’re very adaptable,” he says. “We want to respect our clients’ preferences, but we also have a fiduciary duty, and we have to do what we believe is in the client’s best interests.”
At Genus that means following the data, not the headlines. That doesn’t mean ignoring geopolitical risk. Trade policy, political developments and changing economic relationships can all affect companies and markets. The distinction is how those developments enter the investment process: as factors to assess, rather than automatic reasons to exclude an entire market. “We’re very data driven,” Lusher says. “We invest in areas where we see potential for growth and avoid areas where we see higher risk.”
That means looking at factors such as corporate earnings, growth potential, valuations, sustainability and risk, while considering how geopolitical developments could affect them. Lusher says Canada and the U.S. currently have some of the strongest corporate environments for earnings, with U.S. companies expected to deliver strong earnings growth in 2026⁴. “If the investment case shifts and Europe offers more attractive opportunities, we’re going to look there,” he says.
That flexibility is central to Genus’s active management approach. Rather than maintaining rigid geographic allocations, we adapt our portfolios as the investment landscape changes. If the outlook for a particular country, sector or company deteriorates, that can be reflected in investment decisions. And when new opportunities emerge elsewhere, we can pursue them.
A changing world calls for a thoughtful portfolio
Geopolitical risks are changing the global economic landscape, and investors are right to pay attention. But investing closer to home isn’t necessarily the same as reducing risk.
Rather than focusing solely on how much of a portfolio should be invested in Canada, the U.S. or any other region, investors can ask whether each investment supports the portfolio’s broader goals, reflects their values and provides an appropriate balance of growth potential and risk.
The world may be redrawing its economic map, but the smartest portfolio response may be to look more closely – not simply closer to home.
Interested in exploring how values-aligned investments may fit into your wealth management approach? Explore our impact investment services today.
References
¹ Hempel, L., Conway, M., Doheny, M., & Singhal, S. (2026, January 8). Decoding disruption to reshape manufacturing footprints. McKinsey & Company. Retrieved August 31, 2026, from https://www.mckinsey.com/capabilities/operations/our-insights/decoding-disruption-to-reshape-manufacturing-footprints
² Global Risks Report 2026. (2026, January 14). World Economic Forum. Retrieved August 31, 2026, from https://www.weforum.org/publications/global-risks-report-2026/digest/
³ Raman, M. (2026, August 25). Canadians can boycott U.S. travel and alcohol. But investments are a different story. The Globe and Mail. https://www.theglobeandmail.com/investing/personal-finance/retirement/article-us-travel-alcohol-boycott-investments-stocks/
⁴ Quinsee, P. (2026, July 28). Global Equity Views 3Q 2026. https://am.jpmorgan.com/ca/en/asset-management/institutional/insights/portfolio-insights/asset-class-views/equity/
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