January 2025 Update

Please find in this email our January 2025 Updates:

Launch of 6 new Segregated Funds, 4 Index Based and 2 Active Funds

iA Global Asset Management 2025 Outlook

Summarized by manager below

IAGAM – Dan Bastasic

·     Higher yielding equities with reasonable valuations will provide better risk-adjusted returns in 2025 with consumer-related stocks, financials and utilities offering the best risk-reward

·     Fixed income holdings remain higher-quality high yield bonds that have increased sensitivity to the economy with increased duration via investment grade bonds

·     Active management of currency as a hedge to a lower U.S. dollar as rate decline

IAGAM – Dan Rohinton

·     Maintain a positive outlook for the U.S. economy, driven by potential rate cuts, tax cuts, reshoring and productivity gains from AI and new technology

·     Added exposure to materials, consumer discretionary and industrials as they anticipate a pick-up in construction activity driven by nearshoring

·     They believe in the long-term growth of AI but the trade appears saturated and valuations stretched. They will stay focused on high-quality companies integral to the AI value chain

IAGAM – Marc Gagnon and David Caron

·     Canadians stocks continue to offer asymmetric upside potential as valuations are compelling compared to the U.S.

·     Banks will continue to perform well. With rates falling, revenue growth for the sector is expected to grow as more people seek loans for mortgages or business expansion

·     Will continue to evaluate the exposure to commodities with a view to the impact of potential tariffs on China and the possible implementation of significant fiscal stimulus to counterbalance the effect of a trade war. Sectors and companies exposed to raw materials could respond well

IAGAM – Maxime Houde

·     Expects AI dominance in 2025 but in a different way – shifting from semiconductors to the infrastructure and software layers

·     Several secular tailwinds will drive market performance in 2025 – advances in AI and automation, acceleration of reshoring, and continued strength of consumer spending

IAGAM – Asset Allocation Team

·     Continued overweight distributed across most regions with emphasis on the U.S.

·     Improved stimulus measures in China are notable, which should help emerging markets recover and have positioned the strategies accordingly

·     While global rates have become more appealing, they remain cautious about increasing fixed income exposure due to inflationary risks associated with evolving trade policies and strong growth data from the U.S., which may limit the extent of Fed cuts

IAGAM – Fixed Income (Alexandre Morin, David McCulla, Dominic Siciliano)

·     Will continue to be agile in their portfolio construction but are of the view that rates will decline further and have positioned the portfolio longer duration than the benchmark

·     Modestly overweight provincial bonds, looking to benefit from the extra carry

·     Prefer shorter duration within corporate bonds

Loomis Sayles – Global Diversified, Global Opportunities

·     Opportunities in technology spanning semiconductor manufacturing and equipment, software, and consulting companies. Industrials with pricing power by offering critical components, tools or services

·     Increased non-U.S. fixed income. Within the U.S. they favour duration and remain mindful that credit valuations look tight relative to history

Loomis Sayles – Global Multisector Bonds

·     They favour extra spread pick-up available in credit markets with fixed income returns driven by carry

·     They believe the yield curve will steepen further, benefitting short-to-intermediate part of the curve

·     Maintain a balanced risk profile between interest rate and spread risk throughout 2025

Loomis Sayles – Floating Rate Income

·     With rates not expected to come down as sharply– bank loans offer higher all-in coupons than anticipated, comparable to high yield with the added benefit of being senior secured

·     Remain focused on building and maintaining a yield advantage with appropriate risk compensation

·     Positioning in higher quality as lower quality end of the market is not being adequately compensated currently

QV – Canadian Equity Small Cap

·     The current environment of discounted valuations and lower interest rates provides a construction outlook for small- caps

·     Maintain exposure to resilient, growing and reasonably priced businesses

·     The high quality and diversified nature of the businesses they own should give the portfolio strong potential to perform well in all market environments

Agile Investments – Core Plus Bond

·     Opportunities in U.S. investment grade and high yield, select emerging markets and high-quality sovereigns in Europe and Asia

·     U.S. banking and energy names will likely benefit from the Trump administration’s focus on deregulation and we expect higher oil prices in 2025

·     They are leery of sectors that did not benefit during Trump’s first administration, particularly sectors with high exposure to China

Vancity Investment Management – SRI Moderate, Balanced, Growth

·     Opportunities exist in overlooked areas like industrials, healthcare, and clean energy, particularly after the U.S. election impacted valuations

·     A moderately inflationary environment, global central bank easing, and positive forecasts for economic and earnings growth create a positive setup for equities.

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HISA/DIF - Rates can be found here

·     Current Rate: 2.45% as of January 3, 2024*

·     *Rate subject to change on a weekly basis

·     Available to Corporate Accounts

·     Compensation: Trailer of 0.20%

·     Fund Code: D020

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