The TSX, which reached a fresh record in August, sports less exposure to artificial intelligence than the U.S. S&P 500 index and, as a consequence, less “vulnerability” to climbing bond yields, said National Bank of Canada in its September report on stock markets. AI companies have been issuing mountains of debt, which are vulnerable to rising yields that increase borrowing costs. However, the report authors, Stéfane Marion, Matthieu Arseneau and Alexandra Ducharme, said that de-escalation on the trade front is key to the TSX — up 28.7 per cent this year — continuing to perform. National Bank reviewed its asset mix, maintaining its Canadian equity allocation at 21 per cent, just above the benchmark of 20 per cent. It set U.S. equities at 20 per cent, foreign equities and emerging market equities at three per cent each (just below the five per cent benchmark), fixed income at 48 per cent and cash at five per cent. National is also maintaining above benchmark holdings in energy, industrials and materials “to benefit from Ottawa’s renewed focus on resource development and reindustrialization,” the authors said. Energy accounts for a 16.6 per cent weighting in the equity portion, with most of that directed at oil, gas and consumable fuels. In industrials, nearly five per cent is weighted toward transportation with the rest split between commercial and professional services and capital goods, while much of materials is allocated to gold.