Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, declined by 4.5% (-4.0% in USD) in March, with significant performance differences between US and international equities. The CAD strengthened by 0.5% vs. the USD.
Global Equities
Global equities declined by 4.5% (-4.0% in USD) with US large-cap equities (S&P 500) down 6.2% while international developed (-0.9%) and emerging market equities (+0.1%) performed much better. Weaker US equity performance was mainly driven by heightened uncertainty surrounding Trump’s inconsistent application of tariff policy (announcements followed by delays or pauses in implementation) and uncertainty regarding the “Liberation Day” tariff announcement scheduled for April 2nd. Additionally, US equities were also impacted by fears regarding potential US economic slowdown from the rapid and hatchet-like reduction in federal government employment, which also affects the large federal private contractor landscape. On a relative basis, international developed and emerging market equities performed much better. This relative outperformance was driven by positive investor sentiment towards Europe’s intent for increased multi-year fiscal spending on defense and infrastructure coupled with positive views towards China enacting larger fiscal and monetary stimulus while embracing more pro-business policies.
Globally, value stocks (-1.5%) significantly outperformed growth (-7.3%) stocks. Energy and consumer staples performed best (+4.3%, and -1.0%) while technology, consumer discretionary, and communications services (-9.4%, -7.3%, and -6.7%) performed worst. The Magnificent Seven were down 10.3% as investors scrutinized sharply increasing capital expenditure plans in the face of slowing earnings growth and tariff uncertainty.
Fixed Income
The ICE BOFA Canada Broad Market Index was down 0.3%, with government, provincial, and corporate bonds all down between 0.1% and 0.5%. These modest declines were driven by slight increases in longer-term government bond yields and credit spreads.
Alternatives
The HFRX Global Hedge Fund Index was down 1.3% with most strategies delivering negative performance. Event-driven strategies performed best (+0.5%) while long/short equity and global macro / trend following hedge funds performed worst at -1.8%.
Manager Comments
Russell 1000 Growth Index: -8.9%
Underperformed the S&P 500 (-6.2%) given its large exposure to technology, communication services, and certain consumer discretionary stocks.
Eminence: -7.3%
Modestly underperformed a blended benchmark of MSCI World and US SMID-Cap indexes (-6.0%) given high exposure to US small and mid-cap stocks (indexes down 6.0%-7.5%).
Carrhae: +3.0%
Outperformed the MSCI EM Index (+0.1%) due to lower exposure to AI-related equities, especially in Taiwan, coupled with higher exposure to gold miners.
Waterfall: +1.8%
Outperformed HFRX Hedge Fund Index (-1.3%) and the HFRX Credit Index (-1.1%). Strong performance was driven by high coupon income and mark-to-market gains on positions in aircraft leasing.
CAD March Market Commentary
CAD March Market Commentary
Noteworthy Developments
Global equities, as represented by the MSCI ACWI Index, declined by 4.5% (-4.0% in USD) in March, with significant performance differences between US and international equities. The CAD strengthened by 0.5% vs. the USD.
Global Equities
Global equities declined by 4.5% (-4.0% in USD) with US large-cap equities (S&P 500) down 6.2% while international developed (-0.9%) and emerging market equities (+0.1%) performed much better. Weaker US equity performance was mainly driven by heightened uncertainty surrounding Trump’s inconsistent application of tariff policy (announcements followed by delays or pauses in implementation) and uncertainty regarding the “Liberation Day” tariff announcement scheduled for April 2nd. Additionally, US equities were also impacted by fears regarding potential US economic slowdown from the rapid and hatchet-like reduction in federal government employment, which also affects the large federal private contractor landscape. On a relative basis, international developed and emerging market equities performed much better. This relative outperformance was driven by positive investor sentiment towards Europe’s intent for increased multi-year fiscal spending on defense and infrastructure coupled with positive views towards China enacting larger fiscal and monetary stimulus while embracing more pro-business policies.
Globally, value stocks (-1.5%) significantly outperformed growth (-7.3%) stocks. Energy and consumer staples performed best (+4.3%, and -1.0%) while technology, consumer discretionary, and communications services (-9.4%, -7.3%, and -6.7%) performed worst. The Magnificent Seven were down 10.3% as investors scrutinized sharply increasing capital expenditure plans in the face of slowing earnings growth and tariff uncertainty.
Fixed Income
The ICE BOFA Canada Broad Market Index was down 0.3%, with government, provincial, and corporate bonds all down between 0.1% and 0.5%. These modest declines were driven by slight increases in longer-term government bond yields and credit spreads.
Alternatives
The HFRX Global Hedge Fund Index was down 1.3% with most strategies delivering negative performance. Event-driven strategies performed best (+0.5%) while long/short equity and global macro / trend following hedge funds performed worst at -1.8%.
Manager Comments
Russell 1000 Growth Index: -8.9%
Underperformed the S&P 500 (-6.2%) given its large exposure to technology, communication services, and certain consumer discretionary stocks.
Eminence: -7.3%
Modestly underperformed a blended benchmark of MSCI World and US SMID-Cap indexes (-6.0%) given high exposure to US small and mid-cap stocks (indexes down 6.0%-7.5%).
Carrhae: +3.0%
Outperformed the MSCI EM Index (+0.1%) due to lower exposure to AI-related equities, especially in Taiwan, coupled with higher exposure to gold miners.
Waterfall: +1.8%
Outperformed HFRX Hedge Fund Index (-1.3%) and the HFRX Credit Index (-1.1%). Strong performance was driven by high coupon income and mark-to-market gains on positions in aircraft leasing.
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