iProfile™ Portfolio – Global Neutral Balanced Series F

The iProfile™ Portfolio – Global Neutral Balanced, Series F, rose over the period (3.1%) and outperformed its Global Neutral Balanced peer group median (2.4%). The portfolio benefited most from gains in its traditional equity components. Fixed income exposure was a modest contributor, while low-volatility equities and alternatives detracted. 

Many equity indices, including the S&P 500 Index, the S&P/TSX Composite Index, and the MSCI EAFE Index reached record highs during the period. Equities advanced almost steadily after pivoting from a sharp selloff in early April that was triggered by U.S. President Donald Trump’s so-called “Liberation Day” tariff announcement. Trade policy uncertainty remained high throughout the period and geopolitical tensions flared up, especially concerning fears that Iran might block oil traffic through the Strait of Hormuz in reaction to the U.S. bombing of its nuclear facilities. However, equities continued to push to new highs right up to the final days of the quarter. As a result, the iProfile Canadian Equity Private Pool (7.7%), iProfile U.S. Equity Private Pool (4.4%), iProfile International Equity Private Pool (6.0%), iProfile Emerging Markets Private Pool (8.3%) and iProfile ETF Private Pool (5.6%), which together comprise almost 40% of the portfolio, accounted for three quarters of the total portfolio return. 

The iProfile Emerging Markets Private Pool was the top performer. It outperformed the MSCI Emerging Markets Index Total Return (Net) $ CAD as all component mandates in the pool outperformed the MSCI benchmark. The pool’s performance benefited most from an overweight allocation to, and stock selection in, South Korea, one of the top performing markets in the quarter. The iProfile Canadian Equity Private Pool was the second-best performing component, and as the largest equity segment was the top contributor to the portfolio’s overall results. The Canadian equity pool benefited from its underweight exposure to the energy sector, a position common to several of its component segments. However, it lagged the S&P/TSX Composite Index mainly due to stock selection in the energy, financials and information technology sectors.

The iProfile Fixed Income Private Pool (0.3%) is the largest component iProfile pool in the portfolio and therefore, despite its modest advance, contributed meaningfully to the portfolio’s total return. Global fixed income markets were mixed, with long-term government bonds in Canada and the U.S. losing ground, while short-term bonds and corporate bonds made gains. As a result, the Canadian bond portion, managed by Mackenzie Investments and the pool’s largest component, fell slightly and underperformed the FTSE TMX Canada Universe Bond Index. However, strong results from other segments, such as the high-yield bond component, helped the pool overall to outperform its global fixed income peer group.

The iProfile Active Allocation Pool II (4.6%), as a blend of equity and fixed income, outperformed the fixed income portion but underperformed most of the equity pools, as expected.

The iProfile Alternatives Private Pool (-3.2%) was the portfolio’s top detractor. Both pool components – the Mackenzie Global Macro Fund and the Wellington – IG Global Equity Hedge Pool – declined. The Wellington pool fell mainly due to its short exposures to equity futures as stock prices rose, and the Mackenzie fund fell mainly due to short positions in several currencies as they rallied versus the U.S. dollar. The iProfile Low Volatility Private Pool (-0.5%) also declined due to the drop in U.S. low-volatility stocks. Low-volatility equity indices outside the U.S. rose modestly but underperformed their non-low-volatility counterparts in all regions.