Portfolio returns: Q2 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. July 12, 2013 |
IG Core Portfolio – Growth F | 2.83
| 4.53
| 4.63
| 13.84
| 17.61
| 12.66
| 8.98
| 10.02
|
Quartile rankings | 3 | 3 | 2 | 2 | 2 | 1 | 2 |
IG Core Portfolio – Growth Series F
Portfolio commentary
Q2 2025
Highlights
① The portfolio rose over the period, with positive contributions coming from most of the component funds and pools as equity indices reached record highs.
② European mid-capitalization equities performed best, while U.S. equities contributed the most, in part due to their weight.
③ Low-volatility U.S. equities were the weakest component, as low-volatility equities underperformed non-low-volatility equities and fell in the U.S.
Portfolio Overview
The IG Core Portfolio – Growth rose (4.5%) over the first quarter of 2025. It slightly underperformed the Global Equity peer group median (4.9%). European mid-capitalization equities performed best, while U.S. equities contributed the most. Low-volatility equities, U.S. small-capitalization equities and alternatives detracted.
Many equity indices, including the S&P 500 Index (total return $CAD 5.1%), the S&P/TSX Composite Index (total return 8.5%), and the MSCI EAFE Index (total return $CAD 5.9%) reached record highs during the period. Equities advanced almost steadily after pivoting from a sharp selloff in early April that was triggered by U.S. President Donald Trump’s so-called “Liberation Day” tariff announcement. Trade policy uncertainty remained high throughout the period and geopolitical tensions flared up, especially concerning fears that Iran might block oil traffic through the Strait of Hormuz in reaction to the U.S. bombing of its nuclear facilities. However, equities continued to push to new highs right up to the final days of the quarter. As a result, most equity components of the portfolio gained ground.
The best performing components were the IG Mackenzie European Mid-Cap Equity Fund (11.8%) and the IG Mackenzie International Small Cap Fund (9.4%), which together comprise less than 6% of the portfolio but nonetheless contributed meaningfully to portfolio returns. The Mackenzie – IG Canadian Equity Pool (8.7%) was also among the top contributors and outperformed the S&P/TSX Index mainly due to stock selection in the consumer discretionary and materials sectors.
Large-capitalization U.S. equities contributed the most to the portfolio’s aggregate returns. The top-contributing segment was the T. Rowe Price – IG U.S. Equity Pool (3.6%), which comprises more than 20% of the portfolio. The Mackenzie – IG U.S. Equity Pool (2.5%) also represents more than 20% of the portfolio and was the second-best contributor. However, both segments underperformed the S&P 500 Index. The Mackenzie-managed segment lagged the benchmark mainly due to stock selection in the information technology sector. The T. Rowe Price segment lagged due to underweight exposure to the information technology sector, overweight exposure to the energy sector, and stock selection in the industrials sector. The Mackenzie U.S. Mid Cap Opportunities Fund (3.6%) contributed modestly, while the Aristotle – IG U.S. Small Cap Equity Pool (-2.1%) detracted.
The Mackenzie – IG Low Volatility U.S. Equity Pool (-7.8%) was the weakest performer and top detractor in the portfolio, as low-volatility equities underperformed non-low-volatility equities in all regions, especially in the U.S. The Wellington – IG Global Equity Hedge Pool (-0.8%) also lost ground.
The BlackRock – IG Active Allocation Pool IV (5.8%), ranked among the top contributors to returns, in part because it is the portfolio’s third-largest weight. It benefited most from stock selection in Europe and an overweight exposure to Canada.
Market overview: volatility gripped global markets during "Liberation Day" fallout
The second quarter of 2025 served as a stark lesson in the market’s ability to absorb sharp, politically driven shocks. The period was dominated by the U.S. administration's chaotic trade policy, beginning with the April announcement of sweeping tariffs, which sent global equities into a tailspin. The S&P 500 Index plunged into correction territory, marking its most significant retreat since March 2020.
This initial panic sent investors fleeing to safe havens, a move clearly reflected in the 5.7% surge in gold prices this quarter. However, the administration’s subsequent and rapid reversal of the policy triggered an equally dramatic V-shaped recovery. The initial fear that gripped the market evaporated, and major equity indices charged back into positive territory.
Throughout this turbulence, central banks remained on the sidelines. The U.S. Federal Reserve (the Fed) and the Bank of Canada (BoC) held rates steady, caught between the inflationary threat of tariffs and the risk of a corresponding economic slowdown.
Market outlook: volatility creates opportunities
Investors are currently navigating a landscape dominated by unsettling headlines, from conflicts in the Middle East to persistent uncertainty around U.S. tariffs. The second quarter was a textbook example of headline-driven volatility. The tariff fog has prompted many companies to lower earnings forecasts, but the market’s ultimate resilience has proved once again that knee-jerk reactions to policy announcements are often premature.
While geopolitical shocks often trigger sharp initial declines, a focus on the underlying fundamentals reveals a more enduring picture. Despite short-term turbulence, global opportunities continue to emerge, and maintaining a long-term perspective is key to navigating current conditions and achieving growth.
To discuss your investment strategy, speak to your IG Advisor.
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