Guardian Capital Global Dividend
Mandate commentary
Q2 2026
Highlights
① The mandate returned 8.55%, underperforming the MSCI World Index by 5.21 percentage points, as negative sector allocation and stock selection effects weighed on relative performance.
② Earnings strength helped markets absorb uncertainty.
③ Valuations and rates make selectivity more important.
Mandate overview
The mandate’s relative performance was negatively affected by both sector allocation and stock selection, with the majority of underperformance stemming from information technology and energy. Positive contributions came from stock selection in communication services, led by Alphabet, which benefited from strong cloud and AI-driven growth, as well as holdings in Royal Bank of Canada and Allianz, within financials. Underweight exposures to materials and utilities also added value. Offsetting these gains, stock selection within information technology detracted, despite positive contributions from Nvidia and ASML, while an overweight position in energy weighed on performance
Mandate: Guardian Capital Global Dividend portfolio stock review
Performance contributors
Williams Companies was the strongest contributor to relative performance. The company benefited from record quarterly results, business expansion and higher revenues. Management also reaffirmed its growth plans and increased the dividend by 5%, reinforcing confidence in the sustainability of the payout.
ASML Holding contributed to relative performance, as strong demand related to artificial intelligence supported orders and the company raised its 2026 revenue outlook. The manager remained positive on ASML’s leadership in the technology used to manufacture advanced semiconductor chips and its exposure to continued investment in AI infrastructure.
Performance detractors
Microsoft detracted from relative performance despite reporting results that exceeded expectations. The shares weakened during the mid-June technology selloff as investors grew concerned about AI-related spending, competition from lower-cost AI models and the potential effect of elevated spending on near-term profitability.
Broadcom detracted despite reporting record revenue and strong growth in its AI semiconductor business. The company’s revenue was slightly below market expectations, while its unchanged full-year AI revenue outlook disappointed investors who had anticipated an increase.
Total gross returns:
Total return (USD) | QTD | YTD | 1YR | 3YR | 5YR | SINCE INC. (FEB. 18, 2025) |
GUARDIAN CAPITAL GLOBAL DIVIDEND | 8.55
| 9.95
| 16.66
| 13.66
|
Mandate repositioning
During the quarter, the manager initiated a position in Nvidia, funded by the sale of Motorola Solutions. The purchase reflected Nvidia’s transition toward a more balanced growth payout and sustainability profile, supported by reasonable beta, strong earnings and dividend growth, and fair valuation. Nvidia had consistently ranked as a buy under the manager’s GEMX framework, with forecast earnings growth above 40% since April 2023. Its recent dividend increase also strengthened its sustainable-yield profile.
The manager exited Motorola Solutions after the company deteriorated to a sell ranking under the GEMX framework. Its forecast earnings-per-share growth was slowing, while its proposed US$1.5 billion acquisition of D-Fend Solutions introduced additional integration risk. The manager therefore redeployed the proceeds into Nvidia, which offered a more attractive dividend and growth opportunity.
The mandate has overweight allocations to energy and financials and underweight allocations to materials, communication services, consumer discretionary and information technology. Regionally, the mandate had approximately 72% exposure to North America, 27% to Europe and 1% to Asia.
Market overview: earnings strength helped markets absorb uncertainty
The second quarter of 2026 reinforced the resilience of financial markets. Investors faced conflict in the Middle East, commodity-price volatility, shifting interest-rate expectations and renewed inflation concerns, yet global equities continued to advance as corporate earnings and economic activity remained stronger than expected. The S&P 500 gained 14.9% in U.S.-dollar terms for the quarter, while the S&P/TSX Composite Index advanced 6.4%, supported by healthier earnings expectations and improving market breadth.
Canadian equities were led by a strong rebound in financials, as better-than-expected bank earnings, resilient credit quality and improved capital markets activity lifted sentiment. U.S. equities were supported by earnings strength rather than a simple risk-on rally, with Information Technology leading as AI infrastructure spending continued to anchor sentiment. International equities also contributed meaningfully, with emerging markets Korea and Taiwan benefitting from demand across the global technology supply chain.
Market outlook: valuations and rates make selectivity more important
Markets enter the second half of 2026 with fundamentals remaining broadly supportive, although elevated equity valuations leave less room for error. Earnings growth is likely to remain the key driver of returns, while inflation trends, central bank policy and interest-rate expectations will continue to shape market sentiment.
Across asset classes, diversification remains important. Canadian, international and emerging market equities offer exposure to distinct sources of growth, while higher yields in fixed income continue to provide a cushion against volatility. Selectivity remains key as investors balance opportunities against valuation and policy risks.
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