Bank Of Montreal /Can/ Rotates From Mega-Cap Tech Into Rates, Gold and Banks

The biggest adds by dollars cluster around three themes: Canadian financials, secular but now-cheaper growth, and macro insurance in gold and long bonds.

On the financials side, they added to several core franchise names rather than trading around the edges:

• Royal Bank of Canada (RY) was lifted by +4.2% in shares to 4.10% of the book, reinforcing it as the single largest position and a high-conviction bet on Canadian credit quality and fee income.
• Toronto-Dominion (TD) saw an +8.0% share increase and now sits at 2.87% of the portfolio, signaling comfort with cross-border retail and capital markets earnings into an uncertain rate path.
• Burford Capital (BUR), despite being deeply underwater at -61.0% vs. their average cost, was increased by +8.7% to 2.81% of assets. That’s a classic average-down on thesis, not price move in litigation finance.

In secular growth, they leaned into what they see as still-attractive compounders rather than the frothiest AI names:

• Amazon (AMZN) was a top add, with shares up +12.7% and the stake moving to 2.09% of the portfolio, a clear endorsement of e‑commerce, cloud and advertising earnings power at roughly a 2x money vs. their cost.
• Visa (V) was boosted aggressively by +39.3% in shares to 0.76% weight, expanding exposure to global payments volumes and toll-like fee streams.

The macro book is where conviction rose most sharply:

• iShares 20+ Year Treasury Bond ETF (TLT) was increased by +45.1% to 0.55% of assets, even though the position sits modestly in the red at -6.5% vs. cost. That looks like a rate-cut and recession hedge, not a performance chase.
• Gold exposure was ramped across individual miners and ETFs: Barrick Gold (B) was raised +39.0%, Wheaton Precious Metals (WPM) +21.7%, and the VanEck Gold Miners ETF (GDX) +16.3%. Together with Agnico Eagle (AEM), this cluster now anchors a 4.19% Basic Materials sleeve.

On the sell side, the pattern is disciplined profit-taking in mega-cap winners and cyclicals to fund more idiosyncratic and macro-protective ideas.

The most striking move is in U.S. platform tech:

• Meta Platforms (META) was slashed by -28.5% in shares, a dollar reduction of about $1.35B. With the position still nicely ahead of cost, this looks like harvesting a rapid rerating rather than abandoning the ad-and-AI thesis.
• Alphabet’s twin share classes (GOOGL, GOOG) were cut by -3.6% and -11.8% respectively, and Apple (AAPL) was pared by -3.2%. All three are massively in the money, suggesting the manager sees better marginal risk/reward elsewhere rather than structural concerns.
• Broadcom (AVGO) was trimmed -11.8% despite enormous gains (over 500% vs. average cost), again consistent with taking some AI-ecosystem profits off the table.

Outside Tech, they also lightened up on high-multiple consumer and cyclical names:

• Costco (COST) was reduced by -23.5%, Tesla (TSLA) by -14.4%, and the position in Berkshire Hathaway (BRK.B) by -12.0%. These are classic funding sources: liquid, beloved, and sitting on large gains.
• Energy exposure was nudged down via an -8.0% cut to Canadian Natural Resources (CNQ), even as they maintained Suncor (SU) and added modestly to Enbridge (ENB), tilting the sleeve towards pipelines over pure upstream beta.

Finally, broad U.S. beta was deliberately trimmed: SPDR S&P 500 (SPY) was cut -15.7% and iShares Core S&P 500 (IVV) nudged down. That capital clearly helped pay for the build-out in TLT, IEFA (developed ex-US equities, up +32.2%), and the expanded single-name financials and gold positions.

The sector chart shows a manager not abandoning technology, but right-sizing it against rising macro risk. Technology’s weight dipped from 31.11% to 29.79%, even as they added selectively to names like Microsoft (MSFT, +5.7% shares), Amazon, AMD (+10.8%) and Micron (+11.0%). The cuts came from the most fully rerated mega-caps, not the second-tier enablers.

Finance, by contrast, has been gently but steadily topped up, climbing to 29.38% from 28.66%. The moves in Royal Bank of Canada, TD, Manulife (MFC, +0.8%) and Morgan Stanley (MS, +0.4%) show a tilt toward diversified fee and interest income at reasonable valuations, even as they trimmed U.S. money-center exposure in JPMorgan (-4.7%) and Bank of America (-8.6%).

The other big story is the build in hard assets and rate hedges. Basic Materials rose to 4.19% from 3.68% on the back of aggressive adds to gold miners, while Utilities ticked up (4.35% from 4.18%) via increases in TC Energy (TRP, +10.0%) and Fortis (FTS, +1.1%). At the same time, Industrials slipped to 4.64% from 5.02% as they trimmed Tesla, Canadian Pacific Kansas City (CP, -5.5%) and Canadian National (CNI, -1.3%).

Unclassified ETFs — SPY, IVV, IEFA, TLT, PAVE, GDX and BRK.B — held roughly flat in aggregate at 9.28% vs. 9.17%, but the mix inside changed a lot: less broad U.S. equity beta, more long Treasuries and non-U.S. developed markets. Consumer Discretionary edged up to 7.54% from 7.27%, but beneath the surface they rotated from premium staples-like exposure (COST down) toward Amazon, Netflix (+8.8%) and a still-growing Walmart stake.

Pulled together, these moves paint a manager who thinks the easy money in mega-cap U.S. tech and broad U.S. indices has largely been made. The portfolio still owns the AI and cloud rails — Nvidia, Microsoft, Amazon, AMD, Micron — but is content to fund new ideas by trimming the most crowded, highest-multiple winners and dial down benchmark beta.

Instead, they are leaning into three convex macro expressions: Canadian and global banks as beneficiaries of a normalized curve and resilient credit; long-duration Treasuries via TLT as downside protection if growth disappoints; and a beefed-up gold complex for either inflation persistence or a confidence shock. The choice to average down in Burford Capital underscores a willingness to take liquidity risk when they believe the payoff profile is asymmetric.

For anyone tracking institutional sentiment, the message is clear: this is a rotation from narrative-driven growth toward cash-flow, pricing power and explicit macro hedges. If the cycle stays benign and rates drift lower, the bank, payments and quality-growth book will work. If volatility returns, the combination of TLT, gold miners and defensive utilities should blunt the drawdown. What you do not see in this 13F is a manager betting the next leg of returns will come from simply owning more S&P 500 or more of the same AI leaders at any price.