Noteworthy Developments:
Global markets rebounded sharply in April as moderating geopolitical concerns and strong corporate earnings (particularly in the US) supported a broad recovery across risk assets. The CAD strengthened by 2.4% vs. the USD.
Global Equities:
Global equities rebounded sharply in April, with the MSCI ACWI Index gaining 7.6% as moderating geopolitical concerns, strong corporate earnings (especially in AI-associated sectors), and improving investor sentiment supported a broad recovery across equity markets. US large-cap equities (S&P 500) gained 7.8%, while emerging market equities advanced 11.9% and international developed equities rose 4.9%.
The US equities rally was driven by moderating geopolitical risks (ceasefire announced in the Iran war) coupled with exceptionally strong corporate earnings (especially within the technology sector). International developed markets rallied due to improved risk sentiment which benefited cyclical names in Europe. Japan equities benefited from exposure to AI themes and from yen weakness which helped exporters’ earnings. Currency translation (USD weakness) also augmented international developed equity returns in USD terms. Emerging markets delivered the highest performance with significant contributions from Korea and Taiwan due to their high exposure to semiconductor companies linked to the global AI buildout. Both growth and value stocks advanced during the month, with growth (+10.2%) outperforming value (+5.1%). Sector performance reflected a broad recovery in risk appetite, led by information technology (+16.6%), communication services (+11.9%), and consumer discretionary (+6.6%) sectors. Within technology, large-cap growth companies rebounded sharply on the heels of strong earnings offsetting fears of arge capex spending programs. Semiconductors rallied 26% following exceptional earnings reports and buoyant forecasts driven by seemingly insatiable AI demand. Even hard-hit software companies rallied as fears of mass AI disruption abated for now.
Cyclical sectors also advanced, including industrials (+7.4%) and financials (+4.9%), while more defensive sectors such as healthcare (-2.4%) lagged. The energy sector was the weakest performer at -3.5% as oil prices retreated following the Iran war ceasefire.
Fixed Income:
Fixed income markets posted mixed performance during April, with the Canada Broad Market Index gaining 0.1%.
Canadian government bonds declined 0.3% as yields moved modestly higher across much of the curve, particularly
in intermediate maturities where rates increased approximately 5–10 basis points during the month.
Corporate bonds gained 0.4%, while provincial and municipal bonds rose 0.2%, outperforming government bonds
during the month.
Alternatives:
Hedge funds posted modest gains during April, with the HFRX Global Hedge Fund Index advancing 0.6% (+3.0% in USD). Equity hedge strategies led performance (+3.0%), while macro (+0.4%) strategies also posted gains. Most underlying strategies performed strongly in USD but currency translation detracted from returns in CAD.
Manager Comments:
No specific manager comments for this month.
CAD April Market Commentary
Noteworthy Developments:
Global markets rebounded sharply in April as moderating geopolitical concerns and strong corporate earnings (particularly in the US) supported a broad recovery across risk assets. The CAD strengthened by 2.4% vs. the USD.
Global Equities:
Global equities rebounded sharply in April, with the MSCI ACWI Index gaining 7.6% as moderating geopolitical concerns, strong corporate earnings (especially in AI-associated sectors), and improving investor sentiment supported a broad recovery across equity markets. US large-cap equities (S&P 500) gained 7.8%, while emerging market equities advanced 11.9% and international developed equities rose 4.9%.
The US equities rally was driven by moderating geopolitical risks (ceasefire announced in the Iran war) coupled with exceptionally strong corporate earnings (especially within the technology sector). International developed markets rallied due to improved risk sentiment which benefited cyclical names in Europe. Japan equities benefited from exposure to AI themes and from yen weakness which helped exporters’ earnings. Currency translation (USD weakness) also augmented international developed equity returns in USD terms. Emerging markets delivered the highest performance with significant contributions from Korea and Taiwan due to their high exposure to semiconductor companies linked to the global AI buildout. Both growth and value stocks advanced during the month, with growth (+10.2%) outperforming value (+5.1%). Sector performance reflected a broad recovery in risk appetite, led by information technology (+16.6%), communication services (+11.9%), and consumer discretionary (+6.6%) sectors. Within technology, large-cap growth companies rebounded sharply on the heels of strong earnings offsetting fears of arge capex spending programs. Semiconductors rallied 26% following exceptional earnings reports and buoyant forecasts driven by seemingly insatiable AI demand. Even hard-hit software companies rallied as fears of mass AI disruption abated for now.
Cyclical sectors also advanced, including industrials (+7.4%) and financials (+4.9%), while more defensive sectors such as healthcare (-2.4%) lagged. The energy sector was the weakest performer at -3.5% as oil prices retreated following the Iran war ceasefire.
Fixed Income:
Fixed income markets posted mixed performance during April, with the Canada Broad Market Index gaining 0.1%.
Canadian government bonds declined 0.3% as yields moved modestly higher across much of the curve, particularly
in intermediate maturities where rates increased approximately 5–10 basis points during the month.
Corporate bonds gained 0.4%, while provincial and municipal bonds rose 0.2%, outperforming government bonds
during the month.
Alternatives:
Hedge funds posted modest gains during April, with the HFRX Global Hedge Fund Index advancing 0.6% (+3.0% in USD). Equity hedge strategies led performance (+3.0%), while macro (+0.4%) strategies also posted gains. Most underlying strategies performed strongly in USD but currency translation detracted from returns in CAD.
Manager Comments:
No specific manager comments for this month.
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