Portfolio returns: Q2 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Jul 13, 2015) |
IG Low Volatility Portfolio – Balanced F | 1.96
| 3.35
| 4.58
| 14.12
| 12.81
| 9.18
| 6.97
| |
Quartile rankings | 3 | 3 | 2 | 1 | 2 | 2 |
IG Low Volatility Portfolio – Balanced Series F
Portfolio commentary
Q2 2025
Highlights
① The portfolio gained over the quarter, predominantly due to positive returns from Canadian and global equities and an overweight position in equities relative to bonds.
② Growth equities generated strong returns while global and U.S. low-volatility equities lagged the main equity benchmarks.
③ Overall fixed income underperformed equities, but high-yield bonds performed well, supported by tighter credit spreads and positive investor sentiment towards risk assets.
Portfolio Overview
Global equity markets rebounded strongly in Q2 2025, recovering from early volatility sparked by U.S. tariff announcements. A temporary suspension of most tariffs, along with resilient corporate earnings, helped restore investor confidence. Emerging market and U.S. equities led the rally, driven by information technology and broader growth stocks. Canadian equities also performed well, supported by strength in the materials and financials sectors. EAFE equities posted solid returns, boosted by stronger capital inflows and easing inflation. Meanwhile, low-volatility equities delivered positive returns, supported by resilient, high-quality businesses. Gold prices surged to record highs, while oil declined due to weak demand. Bond markets experienced yield curve steepening, and high-yield bonds outperformed investment grade bonds. The European Central Bank and the Bank of England cut rates, while the Bank of Canada and the U.S. Federal Reserve held steady.
The IG Low Volatility Portfolio – Balanced generated a positive return this quarter on the backdrop of strong equity returns.
The Mackenzie – IG Low Volatility Canadian Equity Pool, the SPDR S&P 500 ETF Trust and the Mackenzie – IG Equity Pool were the top contributors. The Mackenzie – IG Low Volatility Canadian Equity Pool, the heaviest weighted fund in the portfolio, was the highest contributor, led by positive performance in the industrials sector. Stock selection in the industrials and materials sectors added value while selection in the energy and financials sectors detracted from performance, relative to the benchmark. The SPDR S&P 500 ETF Trust performed well, led by resilient corporate earnings, easing inflation and growing optimism around AI-led productivity gains. The Mackenzie – IG Equity Pool, the third-highest contributor, posted positive returns though it underperformed its benchmark. Information technology and financials stock returns were the main contributors to the overall return.
Within bonds, the iShares 20+ Year Treasury Bond ETF and the Mackenzie – IG Income Pool detracted from performance due to rising long-term yields on concerns around rising debt levels in the U.S. The iShares Core U.S. Aggregate Bond ETF benefited from solid gains driven by corporate bonds.
The Putnam – IG High Yield Income Pool was the highest-performing fixed income fund, benefiting from lower duration positioning and narrower corporate spreads.
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: navigating uncertainty: a focus on quality and diversification
Now that the latest U.S. tax legislation has been signed into law and investors are gaining greater clarity on U.S. trade policy, we anticipate equities will continue to outperform bonds. However, given the backdrop of cooling consumer spending and softer private sector hiring, we continue to favour high-quality equities in less volatile industries.
As the U.S.-Canada rate differential has narrowed – benefiting our portfolios – we are gradually reducing our allocation to U.S. bonds in favour of domestic fixed income. Overall, we maintain a neutral view on duration, balancing the likelihood of additional rate cuts in Canada and the U.S. with the potential for sizable debt issuance going forward.
We are confident that in the current economic environment, marked by uncertainty around the impact of tariffs and taxes, diversification across countries and industries will be critical to managing portfolio risks.
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.
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