Decision by Committee (August 7, 2025)

  • The AMC¹ reduced its overweight exposure to the Investment Grade Corporate Bond strategy and increased its allocation to the core Canadian Bond mandate.
  • The AMC views that recent economic and political developments have shifted the balance of risks concerning the outlook for interest rates to be more skewed to the downside, suggesting less relative performance upside for credit.
  • Given the AMC’s continued preference to maintain a bias toward Equity over Fixed Income in its asset mix, reducing corporate credit exposure also serves to lessen portfolio risk amid a persistently uncertain market environment.

Underlying economic momentum has remained generally positive, and corporate earnings have come in better than assumed since the AMC last formally met in June.

With that said, the AMC views that recent market, economic and political developments have shifted the balance of risks to the outlook, particularly for interest rates, to be more skewed to the downside.

Markets appear less likely to react in a “risk on” manner in the event of positive surprises with respect to growth and inflation data, while downside surprises seem likely to see a “risk off” market response.

Given that credit spreads remain tight by historical standards, the outlook suggests that there is less relative performance upside for corporate credit compared to more rate-sensitive government bonds.

Further, with the AMC’s continued preference to maintain a tactical bias toward Equity over Fixed Income in its asset mix, shifting exposure to government bonds would also serve to lessen portfolio risk in a persistently uncertain market environment.

Accordingly, the decision was made to reduce the overweight exposure to the Investment Grade Corporate Bond strategy and increase the allocation to the core Canadian Bond mandate.

The AMC’s allocations remain overweight Equity with a bias toward Global quality growth strategies and underweight Fixed Income. The AMC will continue to monitor economic and market developments closely and stands ready to tactically exploit opportunities that may present themselves.

 

Asset Class Returns (as at August 6, 2025)

Asset Class Representative Index QTD 1 Yr
Canadian Equity S&P/TSX Composite Index 4.2 30.7
Global Equity MSCI World Index (net CAD) 2.5 22.3
Fixed Income FTSE Canada Universe Bond Index -0.4 2.8
Cash FTSE Canada 91 Day T-Bill Index 0.3 3.5

 

Asset Mix Committee Summary Views*

Growth Asset Allocation

Asset Class Strategic Allocation² New Tactical Target Change from prior decision
 Equity 70.0%  77.8% –
Canadian Equity 40.0%  41.5% –
Global Equity 30.0% 36.3% –
Fixed Income 25.0% 22.2% –
Cash 5.0% 0.0% –

 

Conservative Asset Allocation

Asset Class Strategic Allocation² New Tactical Target Change from prior decision
 Equity 30.0%  33.8% –
Canadian Equity 17.5%  18.5% –
Global Equity 12.5% 15.3% –
Fixed Income 65.0% 66.2% –
Cash 5.0% 0.0% –

 

 

Download the full report

 

 

 

* These strategic allocations and tactical targets represent the AMC’s tactical views given their assessment of market conditions and performance expectations. Figures may not add up due to rounding.
1 Guardian’s Asset Mix Committee (AMC) consists of investment professionals and asset class specialists. The AMC is charged with overseeing the development and management of multi-asset investment portfolios, specifically addressing asset allocation and areas for advice or communication to such clients as it relates to the makeup of their portfolio.
2 Strategic Allocation represents the AMC’s standard benchmark allocation.

This commentary is for general 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.

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. The opinions expressed are as of the published date 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 are also 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. Index returns are for information purposes only and do not represent actual strategy or fund performance. Index performance returns do not reflect the impact of management fees, transaction costs or expenses. 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 manages portfolios for defined benefit and defined contribution pension plans, insurance companies, foundations, endowments and investment funds. Guardian Capital LP is a wholly owned subsidiary of Guardian Capital Group Limited, a publicly traded firm listed on the Toronto Stock Exchange. For further information on Guardian Capital LP, please visit www.guardiancapital.com. All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.

Published: August 11, 2025