Portfolio returns: Q4 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Apr 11, 2022) |
IG U.S. Taxpayer Portfolio – Global Equity F | -0.55
| 2.01
| 18.26
| 18.26
| 18.90
| 12.83
| ||
Quartile rankings | 2 | 2 | 1 | 1 | 2 |
IG U.S. Taxpayer Portfolio – Global Equity Series F
Q4 commentary 2025
Highlights
① The IG U.S. Taxpayer Global Equity Portfolio underperformed its benchmark over the quarter, net of underlying ETF fees.
② Relative value country positioning detracted from performance.
③ Relative value sector positioning within U.S. equities detracted from returns.
Portfolio Overview
The IG U.S. Taxpayer Global Equity Portfolio underperformed its benchmark over Q4 2025.
Country-relative value positioning was modestly negative over the quarter, driven by underweight positions in Germany and Switzerland. Overweight positions in the U.K., Spain and Japan were additive. Sector rotation in U.S. equities was also slightly negative, as overweight positions in industrials and communication services were additive, while an underweight position to financials detracted.
Market overview: global growth strengthened, inflation eased, policy supportive
Markets ended the fourth quarter of 2025 on a strong note, capping a year defined by resilience and broad-based gains. Equities led performance, as investors looked beyond policy noise and focused on improving fundamentals. Global markets advanced, supported by steady corporate earnings, easing inflation pressures and a clear shift toward lower interest rates. Canada outperformed most developed peers, driven by strength in materials and financials, while European and Asian markets rebounded on firmer trade activity and renewed investor confidence. In the U.S., equity performance remained positive, led by technology and communication services, with improving breadth across sectors signalling a healthier market foundation.
Fixed income delivered modest but positive returns, as central banks continued to ease policy. Government yields declined on the short end while longer maturities remained stable, allowing coupon income to drive returns. Credit conditions stayed firm, underscoring the strength of corporate balance sheets entering 2026.
Market outlook: shifting priorities
In 2025, we saw two distinct U.S. policy phases. Early in the year, U.S. policy was a source of volatility through tariffs, immigration measures and DOGE-related actions. In the second half, policy shifted toward calming markets, and investors embraced the idea that U.S. policymakers would “run the economy hot” to support asset prices and onshore critical industries. Alongside increased defence and security spending globally, this drove a broad rally in the second half of the year, with equities, bonds and the U.S. dollar all performing well. We believe the limits of “run it hot” policies are becoming clearer: governments are increasingly prioritizing national security, supply-chain resilience and re-industrialization over market efficiency, using tools such as tariffs, subsidies, defence spending and direct stakes in strategic industries. At the same time, central banks appear less willing to support markets through large-scale bond buying, focusing instead on policy rates and short-term liquidity. These shifts point to a less supportive environment for broad risk-taking and greater vulnerability to volatility.
Despite significant policy support, U.S. industrial production remains below pre-pandemic levels, with weakness spreading to consumers, housing and manufacturing employment. With U.S. growth and cyclicals priced optimistically, we see more attractive, underappreciated opportunities outside the U.S. — particularly in Japan and parts of Europe — where growth, inflation dynamics and fiscal support are more favourable.
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