Portfolio returns: Q4 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Oct 25, 2021) |
IG Climate Action Portfolio – Global Equity F | -1.37 | 1.14 | 12.66 | 12.66 | 16.49 | 7.51 | ||
Quartile rankings | 3 | 2 | 2 | 2 | 2 |
IG Climate Action Portfolio - Global Equity Series F
Q4 commentary 2025
Highlights
① The portfolio appreciated during the quarter, amid varying equity market returns across regions.
② The portfolio’s U.S. equity allocation detracted from performance.
③ Canadian equities outperformed U.S. markets, benefiting from their cyclical sector mix and improving global risk appetite.
Portfolio Overview
Global markets advanced in Q4 2025, as easing inflationary pressures and improving earnings expectations supported investor confidence. Equity performance varied across regions, with developed markets in Europe and Japan posting solid gains, while emerging markets delivered mixed results. South Korean equities were a notable outperformer, while Chinese equities lagged amid ongoing economic and policy challenges. Canadian equities outperformed U.S. markets, benefiting from their cyclical sector mix and improving global risk appetite. A weaker U.S. dollar further supported returns for non-U.S. assets and emerging markets. Value outperformed growth across global equities, and large caps outperformed small caps. Commodity markets were mixed, with strong gains in gold offset by declines in oil prices. Fixed income markets delivered modest gains overall, supported by a resilient credit performance, while Canadian government and inflation-linked bonds lagged, as domestic yields remained firmer than those in other major developed markets.
The IG Climate Action Portfolio – Global Equity generated a positive return this quarter.
The Mackenzie Greenchip Global Environmental Equity Fund, the Putnam - IG Sustainable Leaders Pool and IG Climate Action Portfolios - Betterworld Canada I IG Fund were the largest contributors to performance. The Mackenzie Greenchip Global Environmental Equity Fund delivered positive returns for the quarter, outperforming its benchmark. Stock selection in the industrials, utilities and information technology sectors contributed to performance, while a lack of allocation to the health care and financials sectors were detractors. The Putnam - IG Sustainable Leaders Pool posted positive returns for the quarter, outperforming its benchmark. Stock selection in health care and communication services contributed most to performance, while stock selection in information technology and industrials sectors were the primary detractors. IG Climate Action Portfolio - Betterworld Canada I IG Fund generated positive returns for the quarter although it underperformed its benchmark. Performance was supported by an underweight allocation to the energy sector and stock selection in the consumer discretionary sector, while stock selection in materials and financials detracted from performance.
The Rockefeller - IG Climate Solutions Pool and the iShares ESG Advanced MSCI USA ETF were the only detractors from performance for the quarter, while iShares ESG Advanced MSCI EAFE Index ETF Trust Units was the smallest contributor to portfolio returns. The Rockefeller - IG Climate Solutions Pool generated a negative return and underperformed its benchmark. Security selection in the information technology and industrials sectors were the leading detractors. Security selection in utilities and consumer staples sectors were the leading contributors.
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: positive on equities, diversified globally, selective in bonds.
Our outlook for equities in 2026 remains positive, supported by strong corporate earnings and a resilient U.S. economy. However, we expect higher volatility than in 2025, as the second year of a U.S. presidential term has historically been more volatile. Within equities, we have increased our allocation to Canadian stocks, supported by resilient economic data and upward earnings revisions. We continue to find attractive valuations in Japan, while in the U.S. we have shifted to a neutral stance due to elevated valuations in certain sectors.
In fixed income, we remain neutral on duration, as markets are already pricing in roughly two rate cuts for 2026, which we view as fair. We are also monitoring market reactions ahead of the announcement of the next U.S. Federal Reserve Chair.
In currencies, our long-term view is for the U.S. dollar to depreciate against major currencies, including the euro and Japanese yen.
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