Portfolio Management Team Update

Market Review 

After six straight months of gains, the global equity rally finally stalled in November on concerns about market valuations and the uncertain payoff from the colossal amounts being spent on artificial intelligence (AI) infrastructure. The TSX Composite rose for the seventh month, gaining 3.7% as mining stocks surged and consumer sectors jumped on improved sentiment, while the cyclical energy and financial groups gained 4%. The S&P 500 and Dow Jones Industrial Average eked out marginal gains of 0.1% and 0.3% respectively, and the Nasdaq Composite fell 1.5%, its first monthly pullback since April. Most major European indices posted narrow gains, with Asian markets broadly lower. The MSCI AC World Index was little changed last month (-0.05%) for a YTD gain of 17.2%.  

(Sources: FactSet, Bloomberg)  

Outlook  

Recent economic data underscores the extent to which the Canadian economy has been holding up in the face of U.S. tariffs. The economy added 53,600 jobs in November, the third consecutive month of unexpectedly strong gains as total jobs added exceeded 180,000 over this period, while the unemployment rate fell by the most since 2022 to 6.5%. According to Statistics Canada, the Canadian economy also grew at a surprisingly strong 2.6% annualized pace in Q3, driven by housing and government spending, after a 1.8% decline in Q2 caused by a large drop in exports of goods.  

As was widely expected, the Bank of Canada kept its policy rate unchanged at 2.25% (Figure 1) at its December 10 meeting. Also on December 10, the Federal Reserve delivered a third straight rate cut, lowering the benchmark federal funds rate by a quarter point to a range of 3.50%-3.75%, and maintained its outlook for just one additional cut in 2026. While the government shutdown has delayed the release of key data, the latest jobs numbers show that the U.S. labor market is cooling but not weakening rapidly.  

Although multiple rate cuts may no longer be on the horizon, strong earnings growth could lead to a continuation of the rally in 2026. Earnings for both the TSX Composite and S&P 500 are forecast to grow by 14%-15% next year, up from about 12.5% this year. Based on forecasts compiled by FactSet, the median end-2026 target for the TSX is 35,200, and just above 8,000 for the S&P 500.  

Portfolio Strategy 

Our portfolios have delivered robust returns in 2025 and have performed as expected in terms of upside capture and downside risk mitigation. Over the course of the year, we rationalized our portfolio holdings, tactically rebalanced when necessitated by market conditions, and proactively made changes to our portfolios and the Platinum Growth Fund (PGF).  

The Platinum Growth Fund, which we launched in November 2021, has now completed four years of operation. It is a core holding in all our client portfolios and has been a solid performer, with a YTD gain of 13.6% after surging 26.6% in 2024.  PGF allocates capital to funds that are actively managed by leading investment managers, who employ various strategies to identify high-growth opportunities and drive returns that outperform their benchmarks.   

With the AI trade losing steam in the U.S. there is increasing evidence of sector rotation, as investors plough their profits from the massive three-year bull run in technology to other areas with better valuations like healthcare and financials. This sector rotation trend should benefit our portfolios, since they are well diversified across sectors and geographies.  

Despite investor optimism, 2026 could well be a challenging year. While we believe our portfolios are well positioned heading into next year, as a measure of caution, we have been raising up to 12 months of cash for accounts that have periodic withdrawals.   

To accompany this Portfolio Management Update, we’ve also posted our latest video, TSX Among Best Performers Globally. If you haven’t viewed them yet, we recommend doing so, as together, they provide a complete picture of recent market activity and the strategic adjustments we’re making to keep your portfolios balanced.

Please contact any member of the PMT if you have any questions or concerns regarding your accounts. 

This information has been prepared by Elvis Picardo, who is a Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee their accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.