iProfile™ Private Discretionary Portfolio – Global Mid-Neutral Balanced
Q3 commentary 2025
Highlights
① The portfolio rose over the period, with positive contributions coming from all iProfile pools. Emerging market equities performed best, and fixed income exposure lagged.
② Balancing geopolitical uncertainty with positive economic fundamentals.
③ Broad diversification remains the best way to handle mixed market conditions.
Portfolio returns: Q3 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (March 15, 2021) |
iProfile Private Discretionary – Global Mid-Neutral Balanced Series I | 2.68
| 4.95
| 9.12
| 11.27 | 12.31
| 6.71
|
Portfolio overview
The iProfile™ Discretionary Portfolio – Global Mid-Neutral Balanced rose over the period (by 5.0%). All component iProfile pools made gains, with the iProfile Emerging Markets Private Pool performing best, and the iProfile Fixed Income Private Pool delivering the weakest return. The portfolio benefited most from its North American equity components.
Global equity markets were mostly higher in the third quarter of 2025. The S&P/TSX Composite Index (12.5%), S&P 500 (10.5%), Dow Jones Industrial Average (8.0%) and Nasdaq Composite indices (13.9%) all touched record highs (all figures in Canadian dollars, total return). International markets, as reflected in the MSCI EAFE Index (7.1%) were higher, but several countries, including Germany, lost ground in local currency terms. Investors drew comfort, first, from trade deals (or outlines of trade deals) that reduced U.S. tariffs (or threatened tariffs) with many trading partners, reducing uncertainty. Secondly, economic data remained surprisingly solid, especially in the U.S., and contained inflation pressures that allowed several central banks to lower benchmark interest rates, including the U.S. Federal Reserve, the Bank of Canada and the Bank of England. As a result, the iProfile Canadian Equity Private Pool (8.7%), iProfile U.S. Equity Private Pool (9.3%), iProfile International Equity Private Pool (6.2%), iProfile Emerging Markets Private Pool (13.4%) and iProfile ETF Private Pool (9.7%), which together comprise just under 40% of the portfolio, accounted for more than two-thirds of the total portfolio return.
The iProfile Emerging Markets Private Pool was the top performer. It outperformed the MSCI Emerging Markets Index (in Canadian dollars, total net return), as all three of the component mandates in the pool delivered double-digit percentage gains and two outperformed the MSCI benchmark. However, the pool’s overall contribution to portfolio gains was limited by its relatively low weight allocation. The pool’s absolute performance benefited most from an overweight allocation to, and stock selection in, the information technology sector. More than 30% of the pool is invested in the sector and it accounted for more than 45% of the pool’s total return. Almost two-thirds of that came from Taiwan’s and South Korea’s electronics giants, Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, respectively.
The U.S. equity and Canadian equity pools were the top equity contributors to total return. The Canadian pool contributed most, in part due to its weight. However, it underperformed the U.S. pool and its Canadian equity benchmark S&P/TSX Composite Index. The Canadian equity pool’s relative underperformance was mainly due to stock selection in the financials and materials sectors, as well as an underweight exposure to the top-performing materials sector. The U.S. equity pool lagged the benchmark S&P 500 Index, mainly due to an underweight exposure to the technology sector, one of the top-performing sectors in the benchmark. Nonetheless, the information technology sector accounted for over 45% of the pool’s total return in the period.
The iProfile Fixed Income Private Pool (1.6%) is the largest component iProfile pool in the portfolio and so, despite its modest advance, contributed meaningfully to the portfolio’s total return. Global fixed income market returns were mostly modestly positive in the quarter, as bond yields slipped lower in North America but edged higher in Europe and Japan. Fiscal concerns (worries about increased government spending and inflation), in some cases related to political uncertainty, put upward pressure on bond yields in the U.K., France and Japan in particular. As a result, North American bonds outperformed international bonds. In both Canada and the U.S., corporate bonds slightly outperformed government bonds, with high-yield bonds outperforming investment-grade corporate bonds, as credit spreads narrowed. The multi-sector fixed income segment (managed by Manulife and added to the pool in late 2024) was the best-performing pool component. The IG Mackenzie Real Property Fund was the only pool component to lose ground and detracted from the pool’s return.
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: solid reasons for optimism, despite ongoing uncertainty
Looking ahead, the normalization of inflation is a key development, providing central banks with the flexibility to begin an easing cycle over the next six to 12 months. This anticipated shift toward more accommodative monetary policy is expected to lower borrowing costs, creating a supportive foundation for economic activity.
This should help the macroeconomic environment sustain corporate strength. Earnings are projected to remain robust, building on a consistent trend of exceeding expectations. Resilient corporate profitability continues to be a primary driver of market performance.
The combination of impending rate cuts and durable earnings growth establishes a constructive outlook for equities. This environment reinforces the principle that focusing on underlying fundamentals, rather than reacting to short-term market volatility, is a prudent strategy for capturing future growth potential.
To discuss your investment strategy, speak to your IG Advisor.
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