iProfile™ Private Discretionary Portfolio – Global Neutral Balanced
Portfolio commentary Q2 2025
Highlights
① The portfolio rose over the period, with most positive contributions coming from the component equity iProfile pools. Low-volatility and alternative exposures detracted.
② Equities staged a sharp V-shaped recovery after tariff reversal.
③ Investors look ahead to trade-policy clarity.
Portfolio returns: Q2 2025
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. (March 15, 2021) |
iProfile Private Discretionary – Global Neutral Balanced
| 1.80
| 3.04
| 4.35
| 11.74
| 11.40
| 6.55
|
Portfolio overview
The iProfile™ Discretionary Portfolio – Global Neutral Balanced rose over the period (3.0%) and outperformed the 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.
Market overview: volatility gripped global markets during "Liberation Day" fallout
The second quarter of 2025 served as a stark lesson in the market’s ability to absorb sharp, politically driven shocks. The period was dominated by the U.S. administration's chaotic trade policy, beginning with the April announcement of sweeping tariffs, which sent global equities into a tailspin. The S&P 500 Index plunged into correction territory, marking its most significant retreat since March 2020.
This initial panic sent investors fleeing to safe havens, a move clearly reflected in the 5.7% surge in gold prices this quarter. However, the administration’s subsequent and rapid reversal of the policy triggered an equally dramatic V-shaped recovery. The initial fear that gripped the market evaporated, and major equity indices charged back into positive territory
Throughout this turbulence, central banks remained on the sidelines. The U.S. Federal Reserve (the Fed) and the Bank of Canada (BoC) held rates steady, caught between the inflationary threat of tariffs and the risk of a corresponding economic slowdown.
Market outlook: solid reasons for optimism, despite ongoing uncertainty
The world is rarely free of turmoil. Over the past five years, the world economy has faced a global pandemic, multi-decade inflation highs, aggressive interest rate hikes and significant international conflicts. Yet, despite these challenges, markets have demonstrated resilience as businesses adapt, consumers adjust, and economies discover new pathways to growth.
Looking ahead, trade policy clarity and its influence on corporate earnings will be key drivers of market sentiment. Attractive equity valuations and the potential for mid-teens earnings growth provide reasons for optimism, though uncertainty around policy and geopolitical risks remains a headwind. Central banks are expected to shift toward more accommodative monetary policy, with rate cuts anticipated in some regions. This could support economic growth while stabilizing markets, particularly in fixed income.
Persistent volatility may weigh on sentiment in the near term, especially in areas more exposed to trade tensions. However, as these risks moderate, the outlook should improve, with opportunities emerging in sectors poised to benefit from easing uncertainty. It’s important to remember that volatility, while challenging, can also create opportunities.
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Commissions, fees and expenses may be associated with mutual fund investments and the use of iProfileTM Managed Asset Program. Read the prospectus and speak to an IG Advisor before investing. The rate of return is the historical annual compounded total return as of June 30, 2025, including changes in value and reinvestment of all dividends or distributions. It does not take into account sales, redemption, distribution, optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, values change frequently and past performance may not be repeated. An asset allocation service, iProfile is a managed asset program for clients with a minimum of $250,000 invested in the iProfile program. Mutual funds and investment products and services are offered through the Mutual Fund Division of IG Wealth Management Inc. (in Quebec, a firm in financial planning). And additional investment products and brokerage services are offered through the Investment Dealer, IG Wealth Management Inc. (in Quebec, a firm in financial planning), a member of the Canadian Investor Protection Fund.
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