Portfolio returns: Q2 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Apr 19, 2022) |
IG Mackenzie U.S. Dollar Fund – Global Equity F | 2.91
| 6.77
| 6.53
| 13.07
| 16.13
| 10.39
| ||
Quartile rankings | 4 | 4 | 4 | 3 | 1 |
IG Mackenzie U.S. Dollar Fund – Global Equity Series F
Portfolio commentary
Q2 2025
Highlights
① The fund generated a positive return, as U.S. equities gained during the quarter.
② The information technology and financials sectors contributed positively to performance.
③ Currency hedging was a major detractor to returns.
Portfolio Overview
The IG Mackenzie U.S. Dollar Fund – Global Equity generated a positive return against the backdrop of a strong U.S. equity market, although it underperformed its benchmark.
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.
Within this economic and market backdrop, the IG Mackenzie U.S. Dollar Fund – Global Equity posted a positive return, although it underperformed its benchmark. Allocations to the information technology and financials sectors contributed to positive performance. An overweight allocation to the consumer staples sector and stock selection in the health care and industrials sectors contributed to relative underperformance.
Additionally, the fund’s 100% currency hedging policy to U.S. dollars was a major detractor from returns as the U.S. dollar lost ground against the Canadian dollar in Q2 2025.
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. Other developed market currencies (U.S. dollar, Japanese yen, euro, and pound) are preferred over the Canadian dollar.
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