Growth remains robust in the United States. It is supported by the consumer spending of higher income households and an infrastructure construction boom, led by artificial intelligence related investments. Productivity gains are elevated and have led to low employment growth and a weak labour market. Concerns about tariffs have decreased, due to both their on-off nature and the ability of economic participants to adapt.
Low enough inflation and weak labour markets led both the Bank of Canada and the Federal Reserve to lower their overnight rate during the quarter.
Manufacturing industries are holding up well in China, but growth is weighed down by the protracted property sector downturn and fragile consumer confidence. Inflation is very low and deflationary pressures persist. Japan, by contrast, has seen sustained enough inflation (four years above 2%). The Bank of Japan raised, in an historic policy shift, its short-term policy rate to 0.75%, its highest rate in 30 years.
Europe remains in a morose mood due to its contracting industrial base and geopolitical uncertainties. The European Central Bank kept the deposit facility rate unchanged due to a pessimistic revision to the inflation outlook.
The MSCI ACWI had a 1.8% return this quarter and 16.6% for 2025.
The Health Care sector (+8%) emerged as the top performer, driven by a rally in the Pharmaceuticals industry (+16%) as concerns regarding U.S. drug pricing eased following Pfizer's government agreements. The Materials sector (+5%) was supported by a rebound in gold and copper producers.
Conversely, the Real Estate (-4%) and Consumer Discretionary (-2%) sectors lagged. Real Estate struggles against poor fundamentals in the office and retail segments, while Consumer Discretionary was weighed down by households curbing non-essential spending.
The Triasima ACWE Fund had a 1.2% return this quarter and 11.7% for 2025.
Security selection was neutral overall; weakness in the Consumer Discretionary and Information Technology sectors was offset by strength in Industrials and Financials. However, sector allocation negatively impacted relative performance.
The following table presents the top and bottom contributors to relative return:
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*Securities not held or underweighted in the Fund.
Turnover focused on eliminating disappointing securities while adding growth and cyclicality to the portfolio. The Consumer sectors were trimmed down to significant underweights. Conversely, cash was deployed into the Information Technology sector to a slight overweight, a first in at least six years. The Healthcare sector was also significantly added to, mainly through pharmaceutical companies.
On the quantitative side, the Fund has superior expectations, and higher revenue and earnings growth parameters than the benchmark. However, its volatility and risk metrics are worse, and its holdings are more expensive.
Despite a mid-quarter five week pause, the MSCI ACWI remained in a strong uptrend in the fourth quarter and set new highs on numerous occasions. Its climb was largely fueled by corporate earnings growth.
The fundamental outlook for global equities improved. Infrastructure and artificial intelligence related investments continue apace, while interest rates are stable and earnings, growing. Governments also remain fiscally and monetarily accommodative.
The posted rate of return is a historical total rate of return compounded annually, except for periods of less than one year, which are not annualized. The rate of return shown takes into account fluctuations in unitholder value and the reinvestment of distributions. The posted rate of return does not take into account investment management fees and income taxes payable by the unitholder, which would have the effect of reducing the return. The Funds are not guaranteed, their value fluctuates, and past performance is not indicative of future results.
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