Portfolio returns: Q2 2026
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (October 30, 2023) |
Canadian Fixed Income Balanced Series I | 1.19
| 5.69
| 6.07
| 10.72
| 12.03
| |||
Quartile rankings | 1 | 1 | 1 | 1 |
iProfile™ Enhanced Monthly Income Portfolio – Canadian Fixed Income Balanced Series I
Q2 commentary 2026
Highlights
① The portfolio gained in Q2 2026, supported by both equity and fixed income allocation.
② Positive returns were led by U.S. equity and Canadian dividend pools, boosted by strong sector positioning and stock selection.
③ Fixed income benefited from government bond exposure and strong security selection in Canadian federal and provincial bonds.
Portfolio Overview
Global equities surged in Q2 2026, driven by the AI infrastructure boom and de-escalating geopolitical tensions. Emerging and developed markets saw gains, propelled by information technology, particularly semiconductors. Canadian equities lagged global peers; however, strong financial sector performance offset declines in energy and materials. A stronger U.S. dollar made U.S assets more attractive for Canadian investors. Globally, growth stocks outperformed value stocks.
Commodity markets reversed, as geopolitical risk premiums faded. Oil plunged, as Middle East conflicts de-escalated, easing supply fears. Gold and Bitcoin also suffered pullbacks, losing support amid sticky inflation and hawkish central bank outlooks.
Low-volatility equities in the U.S. and Canada delivered resilient relative performance, with utilities and consumer staples benefiting from investors' preference for defensive, stable earnings amid elevated geopolitical and macroeconomic uncertainty.
Fixed income saw modest returns amid shifting monetary policy. Core government bonds were flat, as the U.S. Federal Reserve’s hawkish tone on persistent inflation prompted markets to reprice expectations toward potential rate hikes. Despite these duration headwinds, credit markets outperformed core government debt, benefiting from tightening corporate spreads and resilient earnings.
The iProfile Enhanced Monthly Income Portfolio – Canadian Fixed Income Balanced, Series I delivered a positive return for the quarter, supported by gains from both equity and fixed income allocations. All underlying funds generated positive returns.
The iProfile U.S. Equity Private Pool, with a 13% allocation, was the highest contributor, but it underperformed its benchmark. The information technology sector was the highest contributor to absolute performance. Security selection and underweight to information technology, along with selection in health care and financials, were the primary drivers of relative underperformance.
The iProfile Canadian Dividend and Income Equity Private Pool, with a 12% allocation, was the second-highest contributor. The fund outperformed its benchmark, driven primarily by the underweight in the materials sector. Strong stock selection in materials and energy further supported relative performance.
The iProfile International Equity Private Pool, with a 7% allocation, was the next largest contributor, benefiting from strength in the information technology and financial sectors. The fund slightly underperformed its benchmark, due to security selection in communication services and the health care sector.
The Mackenzie – IG Canadian Bond Pool, the largest holding at 62%, was the highest fixed income contributor. Federal and provincial Canadian government bonds supported absolute returns. Relative outperformance was driven by selection in federal and provincial bonds and underweight to federal government bonds.
Market overview: earnings strength helped markets absorb uncertainty
The second quarter of 2026 reinforced the resilience of financial markets. Investors faced conflict in the Middle East, commodity-price volatility, shifting interest-rate expectations and renewed inflation concerns, yet global equities continued to advance as corporate earnings and economic activity remained stronger than expected. The S&P 500 gained 14.9% in U.S.-dollar terms for the quarter, while the S&P/TSX Composite Index advanced 6.4%, supported by healthier earnings expectations and improving market breadth.
Canadian equities were led by a strong rebound in financials, as better-than-expected bank earnings, resilient credit quality and improved capital markets activity lifted sentiment. U.S. equities were supported by earnings strength rather than a simple risk-on rally, with Information Technology leading as AI infrastructure spending continued to anchor sentiment. International equities also contributed meaningfully, with emerging markets Korea and Taiwan benefitting from demand across the global technology supply chain.
Market outlook: balanced positioning amid market uncertainty.
Our outlook for equities remains neutral. While the fundamental backdrop of the economy and corporate earnings remains strong, we are cautious of stretched retail investor positioning, which increases the vulnerability to sharp market sell-offs. From a relative standpoint, we favour U.S. small caps over Canadian equities. The robust U.S. economy continues to support U.S. small caps, which have remained undervalued for a prolonged period, whereas recent Canadian economic data has shown notable weakness. Additionally, we have closed our underweight position in European equities, as the region's economic data has begun to improve.
In fixed income, we maintain a neutral duration stance. Aggressive inflation-fighting rhetoric from the new U.S. Federal Reserve Chair has triggered a flattening of the yield curve, driving short-term yields higher as additional rate hikes are priced in, while long-term yields have declined on lower long-term inflation expectations. This unique curve dynamic, combined with persistently strong U.S. economic data, reinforces our measured and balanced approach to bond positioning.
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