Triasima Canadian Equity Strategy 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 portfolio

The Triasima Canadian Equity Strategy had an 8.5% return this quarter.

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

The following table presents the top and bottom contributors to the relative performance: 

*Securities not held or underweighted in the portfolio.

One focus of turnover was reducing the weight of the Materials sector. Gold producers were trimmed and this sub-industry’s weighting fell enormously from 16% to 5%. The Energy sector was added to and the Real Estate sector re-introduced. The Financials sector weighting grew 5% due to strong performance.

The Three-Pillar Approach™

On the quantitative side, the portfolio has superior expectations parameters, as well as higher earnings growth. 

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 the representative portfolio’s market value and the reinvestment of income. The posted rate of return does not take into account investment management fees and income taxes payable by the account holder, which would have the effect of reducing the return. Investments 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”.) 

The indices and data providers have awarded limited licences to Triasima allowing it to use the above-mentioned indices and data in its portfolio statements. The information provided by the indices and data providers may not be redistributed, sold or used without the prior written consent of the indices providers concerned. The indices providers assume no liability with respect to the accuracy or completeness of these data or for any delay, interruption, or omission with regard thereto, and makes no warranty or declaration, either explicit or implicit, with regard to the results that might be obtained by using these data or as to the marketability or appropriateness of the data for a specific use.