Ahead of the Curve: Monthly Bond Market Recap and Outlook – April 2026

Recap

• Canadian bond markets halted their advance in March, following a surge in near-term inflation expectations driven by rising energy prices amid heightened tensions in the Middle East and concerns around the potential disruptions to the Strait of Hormuz. The broader domestic fixed income market, represented by the FTSE Canada Universe Bond Index, was down -1.97% in March, compared with its +0.06% average March return over the past 20 years.
• In the United States, the Bloomberg U.S. Aggregate Bond Index was down -1.76% (in USD), as yields moved materially higher across the U.S. yield curve. The Federal Reserve (Fed) held the federal rates unchanged at 3.75%, citing still elevated inflation and heightened economic uncertainty, including recent developments in the Middle East, as factors supporting a pause in policy adjustments.
• Domestically, the Bank of Canada (BoC) held its policy rate unchanged in March, pointing to weaker economic activity, elevated uncertainty, and increased inflation risks stemming from higher energy prices as justification for maintaining its current policy stance.
• Together, these dynamics led to a bearish flattening across key yield curve relationships. As a result, shorter-term bonds (FTSE Canada Short Term Overall Bond Index; -0.89%) outperformed mid-term bonds (FTSE Canada Mid Term Overall Bond Index; -2.03%) and longer-term bonds (FTSE Canada Long Term Overall Bond Index; -3.64%).
• Credit spreads on investment-grade corporate bonds, as measured by the Bloomberg Canada Aggregate Corporate Bond Index, widened modestly over the month, reflecting higher credit risk premiums amid rising interest rates, elevated macro uncertainty, and new issues concession in the primary market.

Source: Guardian Capital based on month-over-month (MoM) change data for the FTSE Canada Universe Bond Index from PC Bond, and data from Bloomberg for the Canada Sovereign Curve rates (ID: YCGT0007); as at March 31, 2026

Source: Guardian Capital LP and Bloomberg as of March 31, 2026, based month-over-month (MoM) changes in the Option-Adjusted Spread (OAS) of the Bloomberg Canada Aggregate Corporate Total Return Index

*When the yield curve is upward sloping, bonds with longer maturities have higher yields than shorter-term bonds. As time passes, those longer maturity bonds “roll down” to a lower rate on the yield curve, resulting in capital appreciation.

The Look Ahead

• Markets are reassessing downside risks to growth and the potential for demand destruction, should prolonged disruptions to the Strait of Hormuz keep energy prices elevated. While the near-term response in rates has been characterized by higher yields, the level and shape of the yield curve over the medium-term will depend on how central banks balance inflationary pressure from the energy shock, against the risk of softer growth.
• Yield curve relationships largely remain anchored near historical norms, while the resilience of credit markets, despite equity market volatility, suggests that uncertainty has been absorbed rather than feared, largely supported by still attractive all-in yields and resilient credit fundamentals. In this environment, risk is being priced at the margins, not across the curve or capital structure. For fixed income investors, this continues to favour carry, diversification, and portfolio discipline over event-driven positioning.

Guardian Fixed Income Funds | Current Positioning

GuardBonds™ Investment Grade Bond Funds

• A suite of actively managed, defined maturity bond funds, that can be used to efficiently construct customized bond ladders.
• Mostly invested in Investment Grade bonds purchased at a discount, to take advantage of capital gains potential.¹
• Excellent GICs alternative; more liquid¹ and tax efficient.²

Guardian Canadian Bond Fund

• Similar duration profile relative to its benchmark, the FTSE Canada Universe Bond Index.
• Higher concentration in the mid-term segment of curve which is expected to benefit from carry and roll-down dynamics over time³.
• Overweight exposure in short-term corporate bonds, but a lower relative contribution to spread duration. Relative spread exposure is predominantly allocated to Provincial bonds.

Guardian Investment Grade Corporate Bond Fund

• Similar duration profile relative to its benchmark, the FTSE Canada Mid Term Corporate Bond Index.
• Spread exposure primarily concentrated within the Energy, Communication, and Real Estate sectors.
• Modest allocation in Federal government bonds for defensiveness.

Guardian Strategic Income Fund (Alternative Fund)*

• Added to new and existing issuers across sectors amid intra-month spread widening.
• Reduced credit default swap hedge on spread widening.
• Took profits on hybrid bond outperformers within the Telecommunication and Financial sectors.
• Extended duration in Canadian government bonds as yields across the curve shifted higher.

¹ Each GuardBonds^TM fund, despite having a specified maturity date, is fully liquid (intra-day liquidity on the ETF versions, daily liquidity on the mutual fund versions). GICs – even those of the redeemable variety – do not offer the same option for liquidity should it be needed.

² Each GuardBonds^TM fund prioritizes holding bonds trading at a discount with the intention of holding them until maturity. When a discount bond matures at par value, the price appreciation is treated as a capital gain. Total return on a GuardBonds^TM fund is expected to consist of bond interest income and capital gains. GICs, on the other hand, are always fully taxed as interest income.

³ When the yield curve is upward sloping, bonds with longer maturities have higher yields than shorter-term bonds. As time passes, those longer maturity bonds “roll down” to a lower rate on the yield curve, resulting in capital appreciation.

Canada’s 2025 LSEG Lipper Fund Award -Winning Fixed Income Lineup

The Canada Group Award was based on risk-adjusted performance over 3 years for the following Guardian Capital Funds:

• GC One Fixed Income Portfolio (Series A)
• Guardian Investment Grade Corporate Bond Fund (Series F)
• Guardian Canadian Bond Fund (Series F)
• Guardian Short Duration Bond Fund (Series F)
• Sustainable Income 100 Fund (Series CCF)

Source: LESG based on Guardian Capital’s Fixed Income Fund performance as at July 31, 2025. See disclosure page at the end of for full details and disclaimers.

Fund Details

Source: Guardian Capital based on data from PC Bond, Bloomberg as at March 31, 2026

Characteristics of Portfolio Holdings: The Current Yield, Duration, Yield to Maturity, Coupon, Average Price and Average Quality shown are based on the weighted average of the securities held in the respective Funds’ portfolio, and for the comparative benchmarks they are based on the weighted average of the Index constituents. These characteristics are not the yield, distribution rate or performance return of any Fund and are not intended to represent the distribution or return experience of any unitholder, unless otherwise specified. It is only intended to give investors an idea a particular portfolio characteristic of the underlying securities held in the Fund’s portfolio.

Current Yield: The Current Yield is calculated as the weighted average coupon over the weighted average price of the bonds in the portfolio, as of the date specified and does not represent an actual one-year return. ^Note: For the Strategic Income Fund the yield value reported in the Current Yield column is its Distribution Yield. Distribution Yield is based on Series F distributions per unit over the trailing 12-month period, divided by the end of period unit price. This is a more appropriate measure of the rate of income an investor may expect from the Fund than Current Yield because the Fund may invest in non-coupon paying securities (i.e., futures, options, forwards, etc.) compared to traditional fixed income funds.

YTM: The Yield to Maturity (YTM) shown is the current yield-to-maturity, gross of fees, based on the current market price of the underlying portfolio holdings as at the date indicated. These yields will fluctuate regularly. YTM represents the expected annual rate of return earned on a bond under the assumption that the debt security is held until maturity. ^†Note: For the T-Bill Funds, the YTM value shown is Yield to Maturity at Cost or YTM (at Cost), which is the weighted average YTM (at Cost) of each of the underlying T-Bill securities in the portfolio, net of cash. YTM (at Cost) means the percentage rate of return paid if the T-Bill security is held to its maturity date from the original time of purchase. The calculation is based on the coupon rate, length of time to maturity, and original price of the underlying T-Bill securities. ^^Note: For the Strategic Income Fund the YTM value shown is Yield to Worst (YTW), given the Fund mostly holds high yield securities. YTW represents the expected annual rate of return earned on a bond under the assumption that the debt security is repaid in full ahead of schedule by the issuer. YTW is lower than YTM given the bond would be held over a shorter period, and is more commonly used for high yield securities like the majority of securities in the Guardian Strategic Income Fund’s portfolio.

LSEG Lipper Fund Award Disclosures

The 2025 Canada Group Award was based on risk-adjusted performance over 3 years for the following Guardian Capital Funds:

• GC One Fixed Income Portfolio (Series A)
• Guardian Investment Grade Corporate Bond Fund (Series F)
• Guardian Canadian Bond Fund (Series F)
• Guardian Short Duration Bond Fund (Series F)
• Sustainable Income 100 Fund (Series CCF)

Source: LSEG based on Fund performance as at July 31, 2025. * LSEG Classification uses CIFSC categories in Canada, rather than Lipper Global classifications. Canadian Investment Funds Standards Committee (CIFSC) is a Canadian independent organization that defines the categories of funds.

About the Lipper Methodology

From LSEG Lipper Fund Awards © 2025 LSEG. All rights reserved. Used under license. The LSEG Lipper Fund Awards for Canada are granted annually and highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers. The LSEG Lipper Fund Awards are based on the Lipper Leaders Rating for Consistent Return, which is an objective, quantitative, risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the LSEG Lipper Fund Award that year. LSEG Group is a leading global financial markets infrastructure and data provider. For more information please refer to their website at: www.lipperfundawards.com. Although LSEG Lipper makes reasonable efforts to ensure the accuracy and reliability of the data used to calculate the awards, their accuracy is not guaranteed.

Lipper Leaders Rating for Consistent Return

The Lipper Leaders Rating System includes Lipper Ratings for Consistent Return, which reflects a fund’s historical risk-adjusted returns relative to funds in the same classification, and takes into account both short- and long-term risk-adjusted performance, together with a measure of a fund’s consistency. The measure is based on the Lipper Effective Return computation. Effective Return is a risk-adjusted return measure that looks back over a variety of holding periods (measured in days, weeks, months, and/or years). The overall calculation is based on an equal-weighted average of percentile ranks of the Consistent Return metrics over three, five-, and ten-year periods (if applicable). The highest 20% of funds in each classification are named Lipper Leaders for Consistent Return, with a rating of 5, the next 20% receive a rating of 4, the middle 20% are rated 3, the next 20% are rated 2, and the lowest 20% are rated 1. Lipper Leaders Ratings are subject to change every month.

Lipper Asset Class Group Awards

Asset class group awards for Canada will be given to the best fund family group with at least three equity, bond or mixed-asset portfolios in the respective asset class. The highest average decile rank of the three years’ Lipper Leader for Consistent Return (Effective Return) measure of the eligible funds per asset class group will determine the award winner over the three-year period. In cases of identical results, the higher average percentile rank will determine the winner.

*The Guardian Strategic Income Fund is an alternative mutual fund. It is permitted to invest in asset classes or use investment strategies that are not permitted for other types of mutual funds. The specific strategies that differentiate this Fund from other types of mutual funds include borrowing cash, engaging in short selling and investing in specified derivatives. While these strategies will be used in accordance with the Fund’s objectives and strategies, during certain market conditions they may accelerate the pace at which your investment changes in value. This Fund also pays the Manager a Performance Fee equal to 15% of the amount by which the Investment Performance of the applicable series of Units exceeds the aggregate of the High Water Mark and the cumulative Hurdle Amount during the Performance Period. Please refer to the Fund’s prospectus for additional details. Statistics only reflect bond segment.

For more information on the financial terms used in this document, please refer to the Glossary of Financial Terms on our website at: https://www.guardiancapital.com/investmentsolutions/glossary-of-terms/

DISCLAIMER

This commentary is for informational purposes only and does not constitute investment, financial, legal, accounting, tax advice or a recommendation to buy, sell or hold a security. It shall under no circumstances be considered an offer or solicitation to deal in any product or security mentioned herein. It is only intended for the audience to whom it has been distributed and may not be reproduced or redistributed without the consent of Guardian Capital LP. This information is not intended for distribution into any jurisdiction where such distribution is restricted by law or regulation.

Please read the prospectus, Fund Facts or ETF Facts before investing. Important information, including a summary of the risks, about each Fund is contained in its respective offering documents. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund and exchange traded fund (ETF) investments. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF a stock exchange. If the units are purchased or sold a stock exchange , investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them. For ETF Units and mutual funds other than money market funds, unit values change frequently. For money market mutual fund Units, there can be no assurances that these mutual fund Units will be able to maintain their net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund and ETF securities, including money market funds, are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Mutual funds and ETFs are not guaranteed, and past performance may not be repeated.

The opinions expressed are as of the date of publication and are subject to change without notice. Assumptions, opinions and estimates are provided for illustrative purposes only and are subject to significant limitations. Reliance upon this information is at the sole discretion of the reader. This document includes information concerning financial markets that was developed at a particular point in time. This information is subject to change at any time, without notice, and without update. This commentary may also include forward looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Investing involves risk. Equity markets are volatile and will increase and decrease in response to economic, political, regulatory and other developments. Investments in foreign securities involve certain risks that differ from the risks of investing in domestic securities. Adverse political, economic, social or other conditions in a foreign country may make the stocks of that country difficult or impossible to sell. It is more difficult to obtain reliable information about some foreign securities. The costs of investing in some foreign markets may be higher than investing in domestic markets. Investments in foreign securities also are subject to currency fluctuations. The risks and potential rewards are usually greater for small companies and companies located in emerging markets. Bond markets and fixed-income securities are sensitive to interest rate movements. Inflation, credit and default risks are all associated with fixed income securities. Diversification may not protect against market risk and loss of principal may result. Certain information contained in this document has been obtained from external parties which we believe to be reliable, however we cannot guarantee its accuracy.

Guardian Capital LP is the Manager of the Guardian Capital mutual funds and ETFs. Guardian Capital LP is a wholly-owned subsidiary of Guardian Capital Group Limited, a publicly traded firm, the shares of which are listed on the Toronto Stock Exchange. For further information on Guardian Capital LP or its affiliates, please visit www.guardiancapital.com. All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.

Date published: April 16, 2026