iProfile™ Private Discretionary Portfolio – Global Fixed Income Balanced
Q3 commentary 2026
Highlights
① The portfolio declined modestly but outperformed its peer group median. Equities and alternatives partially offset fixed income weakness.
② Earnings growth provided a powerful tailwind for equities.
③ Inflation, energy costs pushed long-term yields higher.
Portfolio returns: Q3 2026
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (March 15, 2021) |
iProfile Private Discretionary – Global Fixed Income Balanced Series I | -0.76
| -1.12
| 4.03
| 4.99
| 9.25
| 4.73
|
Portfolio overview
The iProfile™ Discretionary Portfolio – Global Fixed Income Balanced declined by 1.24% over the period but performed favourably relative to its Global Fixed Income Balanced peer group median return of -1.61%. Global equity markets advanced during the quarter, supported by resilient corporate earnings and continued investment in artificial intelligence infrastructure. Market leadership also broadened beyond a narrow group of technology companies. However, higher energy prices contributed to renewed inflation pressures, while long-term government bond yields rose in Canada, the United States and other developed markets. The portfolio’s meaningful allocation to fixed income limited its participation in the advance in global equities.
Fixed income holdings were the main detractors from performance. Canadian and global government bonds came under pressure, as rising yields pushed bond prices lower. Longer-term government bonds were particularly affected because they tend to be more sensitive to changes in interest rates.
Within the global fixed income allocation, interest-rate sensitivity had been increased, as government bond yields moved higher, reflecting the view that higher yields presented a more attractive longer-term opportunity. However, yields continued to rise during the period, which weighed on near-term performance. Corporate bonds and income-oriented fixed income investments also detracted. Real property investments provided a partial offset, while mortgage and short-term income holdings offered greater stability in the challenging bond market environment.
Global equity holdings contributed positively despite the pressure from higher interest rates. Canadian equities were the strongest equity contributor, supported by effective security selection within the energy sector. Cenovus Energy and Suncor Energy were among the notable contributors, as energy prices moved higher. U.S. and international developed-market equities also added value, although their contributions were more modest.
Emerging market equities were the only area of the equity allocation to detract. Semiconductor holdings, including SK Hynix and Samsung Electronics, declined amid a broader global sell-off. This weakness partially offset the positive results from Canadian, U.S. and international developed-market equities.
Alternative strategies provided additional support. Global macro investments benefited from rising oil prices, strength in gold and elevated volatility across asset classes. Equity hedge and low-volatility equity strategies also contributed positively, helping to moderate the effect of losses within fixed income.
Overall, positive returns from global equities and alternative strategies partially offset the effect of rising government bond yields. The portfolio’s diversified positioning also helped it perform favourably relative to its peer group median despite posting a modest decline.
Market overview: earnings growth provided a powerful tailwind for equities
The third quarter showed that the current business cycle still has support, but risks have shifted. Growth held up, earnings improved and corporate investment remained firm, but higher oil prices, persistent inflation and rising long-term yields made the path forward less certain. Equities advanced as earnings provided fundamental support, even as higher rates raised the bar for further gains.
Canadian equities benefited from gains in resources and financials. Higher oil prices supported energy, while precious-metals companies were among the strongest performers. Bank earnings were supported by capital-markets activity, trading income and contained credit costs. U.S. equities also advanced, supported by strong earnings and continued technology investment. Higher yields weighed on more rate-sensitive areas.
International markets remained constructive overall, with parts of Asia benefiting from continued demand across the AI technology supply chain. Fixed income faced greater pressure as rising government bond yields outweighed coupon income, while credit remained comparatively resilient. Across markets, the central tension increasingly became earnings strength versus higher inflation and interest rates.
Market outlook: inflation, energy costs pushed long-term yields higher
With the recent earnings strength, the bar for market performance is higher. U.S. valuations are at the upper end of their historical range and have come under pressure from higher bond yields. Investor sentiment points to strong earnings growth going-forward, which could support equities in the near term, but the magnitude of gains may be muted.
The U.S. Federal Reserve and Bank of Canada each face two rate decisions this year, and persistent inflation has shifted central banks toward a tighter policy stance. Long-term yields remain a pressure point for equities, while also improving the income available from bonds.
The U.S. midterms may add to market volatility, but the path forward will be shaped by the economic cycle, inflation and interest rates.
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