CAD June Market Commentary

Noteworthy Developments 

Global equities, as represented by the MSCI ACWI Index, appreciated strongly by 3.5% (+4.5% in USD) during June, with all major regions performing strongly. The CAD strengthened by 1.0% vs. the USD.

Global Equities 

Global equities appreciated by 3.5%, with US large-cap equities (S&P 500) up 4.1%, international developed equities up 1.2% and emerging market equities gaining 5.1%.

The strong S&P 500 performance was driven by a) sustained positive AI sentiment following solid earnings from Nvidia and Broadcom, and strong AI demand from corporations and sovereign nations; b) benign inflation reports with no negative effects from tariffs so far; c) increased likelihood of interest rate cuts in fall 2025 based on Fed comments; d) maintained tariff policies with no significant escalations in rates or rhetoric; and e) growing chances of passing pro-growth tax legislation. The robust performance of emerging markets was mainly due to gains in Korea (+16.5%) and Taiwan (+8.7%), both benefiting from the exceptional performance of key semiconductor stocks.

Globally, growth stocks (+4.1%) modestly outperformed value stocks (+2.8%). Technology and communication services sectors (+8.5% and +5.9%) performed best while health care and consumer discretionary sectors (+0.5% and +0.2%) performed worst.

Fixed Income 

The ICE BOFA Canada Broad Market Index was up 0.1% with government bonds down 0.1% and municipal and corporate bonds up 0.1% to 0.3%. Bond yields were largely stable and corporate spreads modestly tightened.

Alternatives 

The HFRX Global Hedge Fund Index was up 0.1% (+1.1% in USD), with most strategies delivering positive performance in USD terms. Long/short equity (+0.4%) and convertible arbitrage (+1.1%) strategies performed best.

Manager Comments 

Lancaster: +8.0%

Outperformed the MSCI Europe Index (+1.3%) with outperformance driven by idiosyncratic positions with several stocks that responded favorably after earnings results.