Hi. This is Matt Brundage, Bridgehouse. I recently had an opportunity to talk to Sionna's founder and co CIO, Kim Shannon, about how Sionna has navigated the most aggressive tightening cycle in a generation. Here's what Kim had to say.
Well, you know, it's been really an interesting market for us because we have come out of a forty year deathly missionary period from nineteen eighty one until twenty twenty, rates were consistently falling for a very extended period of time into you know, really low disinflationary rates that we'd never seen before in financial market history, which turned the game advantage to the gross of investing where, you know, future for expected earnings are discounted at a lower and
lower rate. And therefore, the present value goes higher and higher. But starting in the summer of twenty twenty, inflation start, you know, reared its, head. And the game changed quite dramatic and you saw that happening quite harshly in the market by the end of twenty twenty one. And that turned the game back to value because the gross stocks in value, and the, value stocks, relative weight could could increase overall. And it caused, some changes in the overall market and economy.
We ended up getting a inverted yield curve and his workly inverted yield curves, since the sixties has always ultimately led to, recessions. You know, within the next year, year and a half or so later. So we we don't officially have the call of a recession that's done by an organization called NBER. And it they tend to not be leading indicator, their lagging indicator. And, once a recession starts,
they tend to last about six months long. So, probably getting closer and closer to that calling point, on it overall. And, what you end up having is the market overall gets, a little bit inexpensive. But the interesting thing for, Canadian investors in particular is that our market is already pretty inexpensive. The Canadian market today is trading at about a thirteen PE multiple. The US is at a twenty one PE multiple. So the Shiller PE multiple expected return for the US over the next decade is
a one percent return. The, Shiller expected return for Canada is, six to seven, which is pretty generous. And the US is such a BMS in the global benchmark, usually about sixty five percent this day these days. It, it affects its expected return because of that hefty waiting of the very expensive US overall. And the global benchmark expected return looks like more than, like, or four percent. So we've got a better future expected return.
You won't see that showing up every year, but we certainly show saw that show up really well. In twenty twenty two. And in its reaffirm, not just on how cheap Canada is on a PE multiple, priced a book, Canada is approximately half of the US level, and we're approximately double the dividend yield. So that's several valuation metrics suggesting Canada's a lot cheaper than the US. The last time we were this cheap relative to the US was
back in 2000. Canada pretty much consistently beat both the US and the global benchmark, over the next eleven years. An interesting factoid, as at the end of June, that, from the beginning of January 2020 till the the recent September quarter end, Canada, actually outperformed the US over the last twenty three years. So that's not well known in the marketplace, overall. So Canada is pretty cheap.
We are likely to go higher, and it means that there's lots of bargains sitting on the floor in Canada. We're looking at our model, and we have a embarrassment of riches of interesting stocks to choose from. And when we look at the expected return of our portfolio, it's showing a very, attractive, expected return of of north of thirty percent on the portfolio we have overall. So stock picking has become, very, effective in Canada, overall.