iProfile™ Private Discretionary Portfolio – Global Equity Balanced
Q4 commentary 2025
Highlights
① The portfolio rose over the period, with positive contributions coming from all iProfile pools. Emerging market equities performed best, while low volatility lagged.
② Global growth strengthened as inflation eased, and policy turned supportive.
③ Equities and quality fixed income remain positioned for growth.
Portfolio returns: Q4 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (March 15, 2021) |
iProfile Private Discretionary – Global Equity Balanced
| -0.22
| 1.90
| 14.33
| 14.33
| 14.45
| 9.05
|
Portfolio overview
The iProfile Discretionary Portfolio – Global Equity Balanced rose over the period (by 2%) and outperformed its global equity balanced peer group median (1.2%). All component iProfile pools made gains, with the iProfile Emerging Markets Private Pool performing best, and the iProfile Low Volatility Pool delivering the weakest return. The portfolio benefited most from its Canadian equity components.
Global equity markets maintained their strength through the fourth quarter of 2025, with the S&P/TSX Composite Index (6.3%), S&P 500 (1.1%), Dow Jones Industrial Average (2.3%) and Nasdaq Composite indices (1.2%) delivering positive returns, despite an initial pullback following record highs in Q3 (all figures in Canadian dollars, total return). International markets, as reflected in the MSCI EAFE Index (3.3%) were higher, supported by easing inflation pressures and improving earnings expectations. Developed markets in Europe and Japan advanced, while emerging markets delivered mixed results; South Korea outperformed, whereas China lagged amid persistent economic and policy challenges. Canadian equities outpaced U.S. markets, benefiting from their cyclical sector composition and improving global risk appetite. A weaker U.S. dollar boosted returns for non-U.S. assets and emerging markets. As a result, the iProfile Canadian Equity Private Pool (4.5%), iProfile U.S. Equity Private Pool (1.2%), iProfile International Equity Private Pool (2.2%), iProfile Emerging Markets Private Pool (5.5%) and iProfile ETF Private Pool (2.3%), which together comprise just over 55% of the portfolio, accounted for more than three-quarters of the total portfolio return.
The iProfile Emerging Markets Private Pool was the top performer. It outperformed the MSCI Emerging Markets Index (in Canadian dollars, total net return), as all three of the component mandates in the pool delivered gains, and two outperformed the MSCI benchmark. However, the pool’s overall contribution to portfolio gains was limited by its relatively low weight allocation. The pool’s absolute performance benefited most from an overweight allocation to, and stock selection in, the information technology sector. More than 30% of the pool is invested in the sector and it accounted for more than all of the pool’s total return. Roughly half of the gains came from holdings in the semiconductor group, especially in South Korea.
The Canadian equity pools were the top equity contributors to total return. The Canadian pool contributed most, in part due to its weight. While it outperformed the U.S. pool, the pool did underperform its Canadian equity benchmark, the S&P/TSX Composite Index. The Canadian equity pool’s relative underperformance was mainly due to stock selection in the financials and materials sectors. For most component mandates, relative positioning in the material sectors was a significant driver of performance. Being moderately underweight to the energy sector was the top contributor. The U.S. equity pool performed in line with the benchmark S&P 500 Index. No single market sector contributed more than 1% to relative performance, either positively or negatively. Almost all significant contributions came from stock selection within sectors. Top contributors included stock selection in the financials and materials sectors, while stock selection in the information technology sector was the top detractor, especially in the semiconductor industry group.
The iProfile Fixed Income Private Pool (0.5%) is the largest component iProfile Pool in the portfolio, however due to its small advance, it only contributed modestly to the portfolio’s total return. Global bonds ended the year firmly in positive territory. In the U.S., the Federal Reserve cut rates for the third consecutive time, lowering the federal funds rate to 3.50%–3.75%, which supported U.S. bonds, particularly at the short end of the curve. Across Europe, most central banks paused easing, while U.K. gilt yields fell after the government’s budget announcement and peripheral debt, like Italian bonds, benefited from credit upgrades. Canadian bonds were steady as the Bank of Canada held rates, though expectations point to prolonged easing ahead. In both Canada and the U.S., corporate bonds outpaced government bonds, with high-yield bonds leading performance as credit spreads tightened. The global bond segment (managed by PIMCO Canada Corp.) was the best-performing pool component. The IG Mackenzie Real Property Fund and the Canadian bond portion of the pool were the worst performing pool components and resulted in negative contributions. The Canadian bond portion detracted from performance, mainly due to the selection of corporate bonds.
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: equities and quality fixed income positioned for growth
Entering 2026, global markets are positioned on a solid footing. Easing monetary policy and supportive fiscal conditions are expected to sustain growth across major economies. In the U.S., healthy earnings and productivity gains continue to anchor performance. Canada benefits from resource strength and steady financials, while Europe and Asia offer improving valuation opportunities through accelerating trade and industrial expansion. Fixed income markets provide renewed income potential as yields stabilize, and credit quality remains robust.
Overall, conditions favour a balanced, diversified approach.
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