Q3 2025 Fund Commentary

Market commentary

Global equities rose in the third quarter of 2025 driven by enthusiasm for artificial intelligence (AI) and healthy corporate earnings. Information technology stocks rose as investors favoured companies with AI exposure, pushing market indices to record highs in the U.S., China, Taiwan and South Korea. Precious metals also performed well. The U.S. Federal Reserve Board cut interest rates, which supported stocks.

European stocks were led by financials, while Canadian equities saw solid results from select materials companies. Japanese stocks posted solid returns, supported by normalizing yields and improved corporate governance. Emerging markets outperformed many major indices, with Chinese stocks surging despite slower economic growth. The Canadian dollar rose against the yen but fell versus other reserve currencies.

Performance

The Fund’s relative exposure to Broadcom Inc., Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and Bombardier Inc. contributed to performance. Broadcom reported better-than-expected results driven by revenues from AI-related demand. TSMC’s shares rose as its profits reached an all-time high due to demand for advanced AI chips. Bombardier benefited from a rising backlog, service revenue and excitement around its upcoming Global 8000 jet.

Relative exposure to Apple Inc., Alphabet Inc. and Fiserv Inc. detracted from performance as they underperformed. Fiserv’s shares declined after it missed growth estimates and lowered its forecast.

At a sector level, exposure to industrials contributed to performance, as did security selection in information technology. Stock selection in financials, consumer discretionary and communication services detracted from performance. At a regional level, exposure to Taiwan, Canada and Spain contributed to performance.

Portfolio activity

The sub-advisor added LPL Financial Holdings Inc., Intercontinental Exchange Inc., Check Point Software Technologies Ltd., Chubb Ltd. and Banco Comercial Portugues SA. Positions in Apple, AXA SA, Mitsubishi Heavy Industries Ltd., CRH PLC and Vinci SA were sold.

Outlook

The Fund is focused on long-term growth of capital through investments in global common stocks, with future income as a secondary objective. Current investing trends include enthusiasm for AI, corporate earnings and the impact of monetary policy shifts such as interest-rate cuts. The sub-advisor believes that the Fund may benefit from exposure to sectors and regions demonstrating resilience and growth, though uncertainties, including tariffs and competition in certain industries, persist.