iProfile™ Portfolio – Global Neutral Balanced Series F

The iProfile™ Portfolio – Neutral Balanced, Series F, rose over the period (1.2%) and outperformed its Global Neutral Balanced peer group median (0.6%). The portfolio benefited most from gains in the iProfile Fixed Income Private Pool (1.4%), in part because it is the largest component iProfile pool in the portfolio. Bonds in Canada and the U.S. were higher as yields fell, more than offsetting declines in some international bonds. Several of the component equity pools had even stronger performances, especially the iProfile International Equity Private Pool (7.9%) and the iProfile Low Volatility Private Pool (5.2%), despite tariff-related uncertainties.

The iProfile U.S. Equity Private Pool was the only constituent pool to lose ground (-4.9%), as the tariff drama pushed economic policy uncertainty to its highest level in several years and, in the eyes of many forecasters, significantly increased the risk of a recession.

The iProfile Fixed Income Private Pool is the largest component iProfile pool in the portfolio and therefore, despite its modest advance, it contributed more than half of the portfolio’s total return. The pool slightly underperformed its global fixed income peer group, mainly due to a decline in the real property segment of the pool. The segments focused on more typical fixed income securities such as government and corporate bonds all gained ground. The Canadian bond portion, managed by Mackenzie Investments, was the top performer. However, it slightly underperformed the FTSE Canada Universe Bond Index Total Return, in part because of exposure to high-yield corporate bonds, which underperformed.

The iProfile International Equity Private Pool was the top contributing equity component and slightly outperformed the MSCI EAFE Index Total Return (Net) $ CAD. European equities significantly outperformed North American markets. Despite exposure to tariff-related uncertainties like other global markets, European economic data generally exceeded expectations during the period. Recent political changes in Europe also led to more aggressive fiscal policies that support economic growth. Most significant was the German election that delivered a market-friendly, pro-growth government. The largest value-oriented segment of the pool, managed by Wellington Investments, was its top performer, reflecting the broad outperformance of value stocks versus growth stocks in international markets.

The iProfile Low Volatility Private Pool also had a strong quarter, as low-volatility equity indices outperformed their non-low-volatility counterparts in most regions. This was especially true in the U.S., which comprises almost 60% of the low-volatility pool. The MSCI USA Minimum Volatility Index climbed over 5% while the S&P 500 Index fell almost 5%, reflecting a sharp rotation away from high-growth stocks, especially the mega-capitalization technology and Internet stocks that dominated U.S. equity performance last year.

The iProfile U.S. Equity Private Pool fell and underperformed the S&P 500, mainly due to its exposure to the information technology sector, which comprises more than one quarter of the pool and accounted for more than 80% of its negative return, despite the pool having an underweight exposure to the sector. Only the large-cap value segments of the pool advanced.