IG Core Portfolio – Balanced Series F

The IG Core Portfolio – Balanced rose (+2.1%) over the final quarter of 2024, led by gains in U.S. equities. It slightly outperformed its Global Neutral Balanced peer group median (+1.7%). The S&P 500 Index (total return $ CAD +9.1%) and Canada’s S&P/TSX Composite Index (total return +3.8%) touched record highs late in the period, with the U.S. presidential election and central bank interest rate cuts in both countries adding only brief bouts of volatility to an otherwise steady trek higher for stocks. In the U.S., optimism for a soft landing was boosted by economic data releases that suggested growth was solid, if not accelerating. Canadian equities rode on the U.S. coattails in the expectation that U.S. strength would mitigate any slowdown in Canada.

Many international equity markets declined (Japan and Germany were notable exceptions) as economic growth struggled and political turmoil and geopolitical tensions weighed on sentiment. Most global fixed income markets were also lower as bond prices fell and yields rose despite falling central bank official interest rates. A significant weakening of the Canadian dollar versus the U.S. dollar added to returns for Canadian investors from international investments.

Because of the strength in U.S. markets, the Mackenzie – IG U.S. Equity Pool and the T. Rowe Price IG U.S. Equity Pool, which together comprise less than 20% of the portfolio, accounted for almost two thirds of the portfolio’s total return. Neither was the portfolio’s top performer – that distinction goes to the smaller Wellington – IG Global Equity Hedge Pool, mainly due to its significant U.S. exposure. The Mackenzie and T. Rowe Price U.S. pools both benefited most from exposure in the information technology sector, but both underperformed the S&P 500 Index. The Mackenzie-managed pool underperformed mainly due to underweight exposure to and stock selection in the consumer discretionary sector, while the T. Rowe Price-managed pool lagged mainly due to selection in the health care and consumer discretionary sectors.

Most international equity components were lower, including the IG Mackenzie European Equity Fund, the IG Mackenzie European Mid-Cap Equity Fund, the IG Mackenzie Pan Asian Equity Fund and the BlackRock – IG International Equity Pool. The IG Mackenzie European Equity Fund was the weakest segment and the portfolio’s top detractor. It underperformed the MSCI Europe Index mainly due to stock selection in the financials sector.

In the fixed income portion of the portfolio, the Mackenzie – IG Canadian Bond Pool was the top contributor, mainly due to its weight at almost 20% of the portfolio. The IG Mackenzie Floating Rate Income Fund was the top performer, but due to its lower weight had limited impact on aggregate results. The three global bond components (Mackenzie – IG Global Bond Pool, PIMCO – IG Global Bond Pool and Mackenzie Sovereign Bond Fund), which together comprise more than 8% of the portfolio, were the top fixed income detractors from performance.