Portfolio returns: Q3 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. July 12, 2013 |
IG Core Portfolio – Balanced Growth Series F | 3.47
| 6.61
| 11.36
| 14.25
| 15.26
| 10.17
| 8.46
| 8.80
|
Quartile rankings | 2 | 2 | 2 | 2 | 2 | 1 | 1 |
IG Core Portfolio – Balanced Growth Series F
Q3 commentary 2025
Highlights
① The portfolio rose over the period, with positive contributions coming from most of the component funds and pools, especially North American equities.
② All equity components outperformed all fixed income components. Emerging market equities performed best.
③ Within fixed income exposure, high-yield bonds performed best. The IG Mackenzie Real Property Fund was the only component to lose ground.
Portfolio Overview
The IG Core Portfolio – Balanced Growth rose (by 6.6%) over the third quarter of 2025 and outperformed its global equity balanced peer group median (6.1%). The portfolio benefited most from gains in its traditional equity components, especially North American equities. All fixed income components of the portfolio underperformed all equity components. As a result, fixed income accounted for only about 5% of the total return. The IG Mackenzie Real Property Fund was the only portfolio component to lose ground over the period.
Many equity indices, including the S&P 500 Index (total return 10.5% in Canadian dollars), the S&P/TSX Composite Index (total return 12.5%) and the MSCI EAFE Index (total return 7.2% in Canadian dollars) reached record highs during the period. Equities advanced almost steadily, with investors drawing comfort, first, from trade deals (or outlines of trade deals) that reduced U.S. tariffs (or threatened tariffs) with many trading partners, reducing uncertainty. Secondly, economic data remained surprisingly solid, especially in the U.S., and contained inflation pressures that allowed several central banks to lower benchmark interest rates, including the U.S. Federal Reserve, the Bank of Canada and the Bank of England. As a result, all equity components of the portfolio gained ground.
The best-performing portfolio component was the JPMorgan-IG Emerging Markets Pool. However, due to its relatively small weight in the portfolio, it had a limited impact on overall results. The Mackenzie-IG Canadian Equity Pool, with a return of more than 10%, was the next-best performer and was the top-contributing equity segment. However, it slightly lagged the S&P/TSX Composite Index, mainly due to an underweight exposure to the top-performing materials sector. U.S. equity components, including the Mackenzie-IG U.S. Equity Pool and the T. Rowe Price-IG U.S. Equity Pool, were also significant contributors. However, they too lagged their primary benchmark, the S&P 500 Index. The Fidelity-IG Canadian Equity Pool and the IG Mackenzie Pan Asian Equity Fund also ranked among the top performers. The equity-heavy BlackRock-IG Active Allocation Pool III was the portfolio’s second-top contributor, in part due to its weight (the largest in the portfolio).
Global fixed income returns were mostly modestly positive in the quarter, as bond yields slipped lower in North America but edged higher in Europe and Japan. Fiscal concerns (worries about increased government spending and inflation), in some cases related to political uncertainty, put upward pressure on bond yields in the U.K., France and Japan in particular. As a result, North American bonds outperformed international bonds. The Mackenzie-IG Canadian Bond Pool, which is the largest fixed income component, was the portfolio’s top fixed income contributor, in part due to its weight. Putnam-IG High Yield Income Pool was the best-performing fixed income component, as high-yield bonds outperformed investment grade bonds, both corporate and sovereign, as credit spreads narrowed.
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: Easing cycle creates supportive backdrop
Investors today face a familiar challenge: separating durable economic signals from short-term noise. While softening labour markets and a temporary pause in manufacturing activity have captured headlines, a deeper look reveals a fundamentally resilient and encouraging landscape for the markets ahead.
The most significant development was the successful normalization of inflation, which is now stable and within central bank targets. This has paved the way for an easing cycle, providing a supportive backdrop for the economy. More importantly, corporate America continues to demonstrate its strength. Earnings have once again surpassed expectations, with second quarter results showing impressive year-over-year growth. This combination of moderating inflation and robust corporate health provides a powerful engine for market performance.
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