Guardian Capital Global Dividend
Mandate commentary
Q3 2025
Highlights
① The mandate underperformed its benchmark, the MSCI World Index, during the quarter. The portfolio’s high-quality bias and balance between secular growth and lower economic sensitivity, coupled with the strategy’s dividend quality requirement, led to a slight lag in the high-beta, momentum-driven market this quarter.
② Balancing geopolitical uncertainty with positive economic fundamentals.
③ Broad diversification remains the best way to handle mixed market conditions.
Mandate overview
The mandate’s underperformance this quarter was due to overall negative sector allocation and stock selection effects. The information technology sector was the strategy's largest contributor to relative performance, from strong stock selection in Broadcom, ASML and Apple. The health care sector contributed to relative performance on strong stock selection from Johnson & Johnson, AbbVie and AstraZeneca. The communication services sector added to strong stock selection from Alphabet, which was partially offset by the underweight allocation. The consumer discretionary sector detracted from relative returns, due to its Darden Restaurants position. The materials sector detracted from relative performance, due to the Air Products and Chemicals position. The consumer staples sector detracted from relative returns on negative stock selection from Costco and a negative contribution from its overweight position. The financials sector detracted from relative performance on negative stock selection from AXA and ICICI Bank, with a positive offset from its Royal Bank of Canada position. The energy sector detracted from relative performance, from the Williams and TotalEnergies positions, with a positive, partial offset from the strategy's overweight allocation. The industrials sector detracted from relative returns, due to the Wolters Kluwer, Republic Services and Waste Management positions.
Mandate: Guardian Capital Global Dividend portfolio stock review
Performance contributors
Broadcom was the strategy's largest contributor to relative performance. During the quarter, the company reported a 63% surge in AI semiconductor revenue and anticipates further acceleration in the fiscal year 2026, due to a new customer (largely believed to be OpenAI), alongside solid growth in its infrastructure software segment, including VMware. Broadcom also reported robust profitability, with a gross margin above 78% and strong operating leverage, leading to better-than-expected earnings. The market remains enthusiastic about the stock, reflecting confidence in its expanding AI market presence and potential future growth with other major technology companies.
Johnson & Johnson contributed to relative performance after reporting second-quarter sales and earnings that exceeded expectations, largely driven by the pharmaceutical and medical devices division. The company also re-addressed its 2025 guidance by raising its full-year sales and earnings targets, indicating that the year is progressing better than previous assumptions. Johnson & Johnson is facing a patent cliff this year, due to biosimilar competition to immunology blockbuster Stelara. The company's strong growth despite this headwind is a testament to its diversified business and foundation of differentiated treatments. Confidence in the company’s diversified portfolio, innovation pipeline and stable dividend growth also supported the stock.
Performance detractors
Wolters Kluwer’s detracted from relative performance. While recurring revenues remain resilient, weakness in non-recurring areas — particularly within financial and corporate compliance — reflected softer demand, regulatory changes and cautious client spending. However, management reaffirmed its 2025 outlook and highlighted a modest improvement in organic growth in July and August, supported by strength in the health, tax and accounting divisions. The company also accelerated its share buyback program, now expected to conclude ahead of schedule, further signalling confidence in the business despite near-term share price volatility.
Novo-Nordisk detracted from relative performance. The company lowered its full-year sales growth forecast and trimmed expected operating profit growth. This revision was mainly driven by slower-than-expected growth for Wegovy in the U.S. obesity market, lower penetration for Ozempic in the U.S. diabetes sector, and increased competition and ongoing challenges from unregulated compounded GLP-1 products. We exited Novo-Nordisk early in the quarter on rising probabilities of a dividend cut, and slower earnings and dividend growth predictions.
Total gross returns:
Total return | QTD | YTD | 1YR | 3YR | 5YR | SINCE INC. (FEB. 18, 2025) |
GUARDIAN CAPITAL GLOBAL DIVIDEND | 4.59%
| 6.72% |
Mandate repositioning
The portfolio managers believe that in this current macroeconomic environment, profitability, stability and safety need to be embraced, so they focus the portfolio on companies with positive earnings growth coupled with strong dividend growth.
Early in the quarter, the manager exited Accenture on declining earnings growth predictions that indicated softer demand due to macroeconomic uncertainties and geopolitical risks. The manager is also cognizant of longer-term structural challenges in the consulting sector that will likely increase competitive pressures, despite strong growth in AI and digital transformation services.
The manager also exited Novo Nordisk on rising probabilities of a dividend cut, and slower earnings and dividend growth predictions. Novo-Nordisk lowered its full-year sales growth forecast and trimmed expected operating profit growth. This revision was mainly driven by slower-than-expected growth for Wegovy in the U.S. obesity market, lower penetration for Ozempic in the U.S. diabetes sector, and increased competition and ongoing challenges from unregulated compounded GLP-1 products.
With the proceeds from the sale, the manager initiated positions in Eli Lilly on strong earnings and dividend growth predictions. Eli Lilly has consistently demonstrated strong financial performance and robust growth in key drug sales and boasts a leading position in the high-demand GLP-1 market. In Q2 2025, Eli Lilly reported a 38% increase in revenue and raised its full-year guidance, validating GEMX’s signals of sustained growth. Eli Lilly’s pipeline, margin expansion and earnings growth projections make it an attractive long-term growth opportunity in health care.
The mandate is overweight the energy, industrials, consumer staples and financials sectors, and underweight the communication services, consumer discretionary, materials and information technology sectors. Regionally, the strategy has approximately 25% weight in Europe, 73% weight in North America and 2% weight in Asia.
Market overview: signs of optimism emerge, despite the noise during "Liberation Day" fallout
The third quarter delivered broad gains across asset classes, with market performance largely overriding a backdrop of cautious sentiment. Investors looked past persistent trade policy headlines, increasingly treating the U.S. administration's tariff policy as noise rather than a core risk. The primary catalysts for the positive performance were a subtle shift toward lower-interest-rate expectations and resilient corporate earnings.
Signals from the U.S. Federal Reserve of imminent rate cuts were followed by a quarter percentage cut in September. Government bond yields eased into the quarter's end, supporting bond prices, while corporate bonds outperformed government bonds.
Market outlook: solid reasons for optimism, despite ongoing uncertainty
Looking ahead, the normalization of inflation is a key development, providing central banks with the flexibility to begin an easing cycle over the next six to 12 months. This anticipated shift toward more accommodative monetary policy is expected to lower borrowing costs, creating a supportive foundation for economic activity.
This should help the macroeconomic environment sustain corporate strength. Earnings are projected to remain robust, building on a consistent trend of exceeding expectations. Resilient corporate profitability continues to be a primary driver of market performance.
The combination of impending rate cuts and durable earnings growth establishes a constructive outlook for equities. This environment reinforces the principle that focusing on underlying fundamentals, rather than reacting to short-term market volatility, is a prudent strategy for capturing future growth potential.
To discuss your investment strategy, speak to your IG Advisor.
Azure Managed Investments™ provides discretionary investment management services distributed by IG Wealth Management Inc., Investment dealer. We will manage your Azure Managed Investments Accounts on a segregated basis in accordance with your investment policy statement and the resulting mandate selected by you. Mandates will be managed by I.G. Investment Management, Ltd. and partner organizations. You are required to make a minimum initial investment of $150,000; please read the Azure Managed Investment Account Agreement for complete details, including fees and expenses.
This commentary may contain forward-looking information, which reflects our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and do not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of September 30, 2025. There should be no expectation that such information will in all circumstances be updated, supplemented or revised, whether as a result of new information, changing circumstances, future events or otherwise.
This commentary is published by IG Wealth Management. It is provided as a general source of information. It is not intended to provide investment advice or as an endorsement of any investment. Some of the securities mentioned may be owned by IG Wealth Management or its mutual funds, or by portfolios managed by our external advisors. It may contain certain forward-looking statements regarding the market conditions which are based upon assumptions believed to be reasonable at the time of publishing. Every effort has been made to ensure that the material contained in the commentary is accurate at the time of publication, however, IG Wealth Management cannot guarantee the accuracy or the completeness of such material and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein.
Past performance may not be repeated and is not indicative of future results. Actual performance may vary due to a range of factors including but not limited to current market conditions, timing of contributions and withdrawals, client-imposed restrictions, fees, expenses, tax considerations and other individual circumstances. There are no assurances that any mandate will achieve its objectives and/or avoid any losses.
Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations.