Triasima Canadian All Capitalization Equity Fund Commentary – Q2 2026

The economy

The war in Iran, which began in late February, defined the second quarter. What started as an energy shock, with the Strait of Hormuz being closed off and Brent oil prices in triple digits, gave way to a fragile diplomatic settlement that formally ended hostilities. However, the peace was quickly contested with Iran threatening ships transiting the Strait without its clearance.  

The United States underestimated its adversary and failed to achieve its foremost objectives: an end to its uranium enrichment program and a regime change. The conflict may have strengthened Iran’s sense of its own power.

Economic growth is below average in most regions of the world. Asian countries, heavy importers of expensive Middle East oil, saw growth expectations fall. Inflation also crept up due to rising energy costs. This tilted Central Banks away from their previous easing bias. 

Labour market weakness remained a widespread lingering concern. A key reason may be the extensive adoption of artificial intelligence tools that improve productivity and suppress job creation. 

The Canadian equity market

The S&P/TSX Composite Index had a 7.0% return this quarter.

The equity markets adopted a risk-on tone when tensions from the Iranian conflict eased. Information Technology (14%) and Financials (14%) were the top-performing sectors. They were, respectively, helped by their growth potential and by strong bank results. 

The Energy (0%) and Materials (-1%) sectors lagged. The winding down of the war lowered price forecasts for oil and several other commodities. Gold stocks underperformed (-8%) with the drop in the geopolitical risk premium.

The Fund

The Triasima Canadian All Capitalization Equity Fund had a 10.5% return.

Security selection accounts for the outperformance, with positive contributions from the Materials, Industrials, Consumer Discretionary and Financials sectors. Sector selection was a partial offset due to the Financials sector underweight.

Main security contributors to relative performance :

*Securities not held or underweighted in the Fund.

One focus of turnover was reducing the Materials sector overweight. Gold and silver producers were sold and these sub-industries’ weighting fell from 14% to 8%. Conversely, the Financials sector gained 7% and its underweight was much reduced. Banks, life insurance and capital markets stocks were bought.

The Three-Pillar Approach™

On the quantitative side, the Fund’s holdings have higher revenue and earnings growth. Volatility and risk metrics are more elevated, however. 

The Canadian equity market resumed its strong uptrend with new all-time highs set in all three months of the quarter. The three strongest style factors were Size, Dividend Yield, and Valuation. Large, dividend paying, value stocks thus led: a rare top combination in recent years.

Lower uncertainty and inflation associated with the war’s end raised the fundamental outlook for Canadian equities. Commodity prices pulled back but nonetheless remain elevated enough, while the corporate world keeps on generating growing profits.

Legal notices

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.

Data on the FTSE Canada 91 Day T-Bill, FTSE Canada Short Term Bond and FTSE Canada Universal Bond reference indices are provided by FTSE Global Debt Capital Markets Inc.  (“FTSE”). Data on the S&P/TSX Income Trust, S&P/TSX Preferred Share, S&P/TSX SmallCap, and S&P/TSX Composite reference indices are provided by TSX Inc. (“TSX”). Data on the S&P 500® Index are provided by Standard & Poor’s Financial Services LLC (“S&P”). Data on the MSCI EAFE, All Country World, and World reference indices are provided by Morgan Stanley Capital International Inc. (“MSCI”). Lastly, the classification of securities according to the Global Industry Classification Standards (“GICS”) is provided jointly by MSCI and S&P. (FTSE, TSX, S&P, and MSCI are hereafter collectively referred to as “indices and data providers”.) 

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