Portfolio returns: Q3 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (Apr 19, 2022) |
IG Mackenzie U.S. Dollar Fund – Global Fixed Income Balanced F | 2.27
| 3.77
| 7.78
| 7.44
| 9.45
| 6.01
| ||
Quartile rankings | 1 | 1 | 4 | 1 | 2 |
IG Mackenzie U.S. Dollar Fund – Global Fixed Income Balanced Series F
Q3 commentary 2025
Highlights
① Global markets advanced in Q3 2025, driven by AI-related stocks and emerging market performance.
② The fund outperformed its benchmark, supported by strong fixed income performance and selective equity gains.
③ The fund’s foreign currency hedging added value, as foreign currencies generally declined against the U.S. dollar.
Portfolio Overview
The IG Mackenzie U.S. Dollar Fund – Global Fixed Income Balanced generated a positive return and outperformed its benchmark, benefiting from a strong fixed income performance.
Global markets advanced in Q3 2025, fuelled by strength in AI-related stocks, easing trade tensions and central bank rate cuts. The U.S. Federal Reserve and Bank of Canada each cut rates by 25 basis points (a quarter of a percentage point), citing slowing job growth. U.S. equities hit record highs, led by AI-related and small-cap stocks. Canadian markets benefited from strength in the materials, information technology and energy sectors. Emerging markets surged, supported by Chinese technology stocks. Gold rallied to historic highs, while oil prices dipped on soft demand and rising supply. Bond markets posted modest gains; high-yield bonds outperformed investment-grade bonds, and emerging-market bonds also benefited from a softer U.S. dollar.
Within this economic and market backdrop, the fund’s global equity mandate, representing 30% of the portfolio, delivered a positive local return but lagged its benchmark. Gains were driven by the information technology and materials sectors. Relative to benchmark, stock selection in the health care sector added value, while selection in the financials and information and technology sectors detracted from performance.
Representing a 41% fixed income allocation, the Mackenzie Canadian Strategic Fixed Income ETF posted a positive return in local terms and outperformed its benchmark. The fund benefited from bond selection in government issues, and corporate energy and financials sectors. An overweight to corporate bonds also added value.
The Mackenzie Core Plus Global Fixed Income ETF, which has a 29% allocation, produced a positive return and outperformed its benchmark. Selection in government bonds added value, while an underweight to corporate bonds modestly detracted from relative performance.
The fund’s foreign currency hedging policy added value, offsetting foreign currency losses from a stronger U.S. dollar during Q3 2025.
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: cautious on equities and strategically constructive on bonds, amid trade turmoil
We remain moderately cautious as regards 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 (the U.S. dollar, Japanese yen, euro and pound) are preferred over the Canadian dollar.
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