Market Update
All index returns are total return (includes reinvestment of dividends) and are in Canadian Dollars unless noted. Sources: *Sources: MSCI, FTSE, TMX, S&P
The first quarter of 2025 has certainly been an interesting one as markets have tried to determine what the new normal will look like with Trump in office for the next 4 years.
Canadian stocks were able to hold steady in the first quarter, the S&P/TSX Composite Index was flat, and the S&P/TSX Small Cap lost 0.3%. The US stock market indexes had a volatile quarter; the S&P500 lost 4.6% in the first quarter. The tech heavy Nasdaq Composite Index had a rough quarter, losing 10.4%, while the small cap Russell 2000 Index declined 9.8% in the quarter.
EAFE stocks (Europe, Australasia, and Far East) started the year on the right foot as they gained 6.2% in the quarter, with European stocks gaining 7.8%. Japan’s Nikkei 225 lost 10.7% in the first quarter and emerging market stocks had a good start to the year with the MSCI Emerging Markets Index gaining 4.5%.
While the Bank of Canada cut interest rates by half a percentage point in the quarter, fixed income markets saw little growth as The FTSE Canada Universe Bond Index gained 2.0% for the quarter, while the FTSE Canada Short Term Bond Index was up 1.7% for the quarter. US fixed income saw positive movement as the Fed held interest rates steady. The Bank of America (BoA) indexes saw little growth in the quarter as the ICE BoA AAA Corporate Index gained 2.6% and the ICE BoA BBB Corporate Index gained 2.3%. The riskier high yield indexes performed worse as the ICE BoA CCC Corporate Index was down 0.7% and the US High Yield Master II increased 1.0%.
Real Estate Investment Trusts (REITs) were able to stay out of the red as the S&P/TSX Capped REIT Index increased 0.5%.
Oil started the year with a 0.3% loss and the diversified Bloomberg Commodities Index was up 7.7% in the quarter.
Portfolio Performance – Q1 2025
Performance of the ModernAdvisor portfolios were predominately positive as the BCV portfolios were the top performer in the quarter for risk levels 3 and below, and the SRI funds were the top performers in the quarter for risk levels of 4 and above.
The high interest savings portfolio returned +0.7% in Q1 2025.
For more details about the performance of our portfolios, visit our website or see our portfolio factsheets here.
Disclosure:
The performance figures above are a time weighted composite of all accounts being managed to the stated risk level, and include ModernAdvisor management fees plus GST/HST, where applicable. Personal portfolio performance experience may vary. All returns are stated in Canadian dollar terms unless indicated otherwise.
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