Portfolio returns: Q2 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Jul 12, 2013) |
IG Income Portfolio – Growth Plus Series F | 1.22
| 1.67
| 2.62 | 11.04
| 8.92 | 6.30 | 5.18 | 5.57 |
Quartile rankings | 4 | 4 | 3 | 2 | 4 | 3 | 2 |
IG Income Portfolio – Growth Plus Series F
Portfolio commentary
Q2 2025
Highlights
① The portfolio gained over the quarter due to positive returns on a backdrop of strong equity markets, whereas bond returns declined.
② U.S. equities, especially growth-oriented technology securities, were a major positive contributor to returns.
③ Government bond returns detracted from performance.
Portfolio Overview
The portfolio was up in the quarter.
Equities exposure, represented by the portfolio’s 56% allocation to the Mackenzie Global Equity Income Fund, was the highest positive contributor to performance. Relative to its benchmark, the fund modestly underperformed. Returns were driven by U.S. equity stocks, primarily from the fund’s 40% allocation to the S&P 500. Growth-oriented technology securities and financial institutions contributed to the major performance gains. Security selection in information technology and industrials sectors contributed to its relative underperformance. The fund’s dividend-generating focus also produced positive returns but lagged broader markets, which adopted a risk-on stance that favoured higher-volatility stocks.
The Mackenzie Global Equity Income Fund also utilizes a stock options strategy, designed to help preserve capital during times of severe equity market stress. As expected, the options strategy detracted from returns as equity markets rallied – the opposite is expected when equity markets decline rapidly.
The Mackenzie Unconstrained Fixed Income Fund, representing 19% of the portfolio, was another positive contributor to performance. Relative to its benchmark, an underweight allocation to government bonds, an overweight allocation to corporate bonds, and security selection within industrials and financials corporate bonds added value, as did hedged foreign currency exposure.
The Mackenzie Canadian Bond Fund, representing 14% of the portfolio, was the largest detractor to performance. The fund posted a slight negative return but outperformed its benchmark. An overweight allocation to corporate bonds and security selection in government bonds were the major contributors to relative performance.
The Mackenzie Sovereign Bond Fund, representing 8% of the portfolio, was another detractor. The fund holds 10-year government bonds across the globe and was negatively impacted by rising yields, which tended to be higher at the longer end of yield curves.
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: cautious on equities, strategically constructive on bonds amid trade turmoil
We remain moderately bearish on global equities. Valuations are elevated relative to macro risks, and U.S. stocks appear stretched after a strong run, with earnings revisions turning lower. International equities continue to offer a more attractive risk-return profile.
Ongoing U.S. tariffs are expected to pressure Canada’s economy and currency. A Canadian recession is increasingly likely, which would prompt the Bank of Canada to cut rates below 2% by year-end. In contrast to the U.S., which is likely to suffer from both a growth and an inflation shock, prices are not as much of a concern in Canada. The Bank of Canada has more flexibility to cut rates without fear of an inflation spike. We hold a neutral view on duration (sensitivity to interest rates), but prefer Canadian government bonds over U.S. Treasuries. Other developed market currencies (U.S. dollar, Japanese yen, euro, and pound) are preferred over the Canadian dollar.
To discuss your investment strategy, speak to your IG Advisor.
Commissions, fees and expenses may be associated with mutual fund investments. Read the prospectus and speak to an IG Advisor before investing. The rate of return is the historical annual compounded total return as of June 30, 2025, including changes in value and reinvestment of all dividends or distributions. It does not take into account sales, redemption, distribution, optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated. Mutual funds and investment products and services are offered through the Mutual Fund Division of IG Wealth Management Inc. (in Quebec, a firm in financial planning). And additional investment products and brokerage services are offered through the Investment Dealer, IG Wealth Management Inc. (in Quebec, a firm in financial planning), a member of the Canadian Investor Protection Fund.
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 June 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 represents the views of our Portfolio Managers and 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. 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.
Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations.
©2025 IGWM Inc.