Noteworthy Developments

Global equities, as represented by the MSCI ACWI Index, appreciated 0.2% (-2.4% in USD) with all regions experiencing negative performance in USD. The CAD weakened further by 2.7% vs. the USD.

Global Equities

Global equities appreciated 0.2%, with US large-cap equities (S&P 500) up 0.2% (-2.4% USD) while international developed equities climbed 0.3% (-2.3% in USD) and emerging market equities performed best at 2.6% (-0.1% USD) . US equities gave back some of their post-election bounce as bond yields rapidly increased in December and investors digested prospects for increased volatility arising from potential Trump policies including increased tariffs.

Globally, growth stocks (3.1% and 0.4% in USD) materially outperformed value stocks (-2.6% and -5.2% in USD) with outperformance driven by appreciation of the Magnificent Seven (6.5% and 3.7% in USD). Value stocks were hurt by rising bond yields and by increased investor pessimism surrounding potential negative effects should Trump’s proposed tariffs be enacted. Technology and consumer discretionary sectors performed best (4.9% and 4.4% led by bellwether US companies with AI theme exposure like Broadcom and Tesla) while cyclical sectors such as materials and energy (-5.4% and -5.6%) performed poorly. Healthcare and industrial sectors also struggled and were down 3.4% and 3.2% respectively. US Small Cap stocks were down 5.8% and gave back much of November’s gains as bond yields rose.

Fixed Income

The ICE BOFA Canada Broad Market Index was down 0.5% with government, provincial and municipal and corporate bonds all down modestly due to rising bond yields. Bond yields generally increased between 10bps-20bps across the curve.

Alternatives

The HFRX Global Hedge Fund Index was up 2.7% (flat in USD) with mixed performance across strategies in USD. Event-driven and global macro / trend following strategies performed best (3.2% and 3.0%, or 0.5% and 0.3% in USD) while convertible arbitrage and credit strategies performed worst at 1.8% and 1.6% (-0.9% and -0.6% in USD) respectively.

Manager Comments

Eminence: -6.4% (-8.8% USD)

Underperformed vs. blend of MSCI World (0.0% and -2.6% in USD) and S&P SMID Cap (-5.0% and -7.5% USD) indices due to larger exposure to smaller-cap companies coupled with idiosyncratic weakness across certain positions.

Russell 1000 Growth ETF: 3.6% (0.9% USD)

Outperformed the S&P 500 (0.2% and -2.4% USD) given its high exposure to Magnificent Seven stocks which performed well as investors continued to favor AI themes.

Russell 1000 Value ETF: -4.3% (-6.8% USD)

Underperformed the S&P 500 (+0.2% and -2.4% USD) given exposure to more cyclically oriented or slower-growth companies. Investors penalized these companies as bond yields rose.

These companies also suffered due to perceptions that they would be more negatively affected under certain Trump policies such as tariffs.