Each quarter, Bâtirente’s Investment Strategy Manager, Jean-François Dumais*, shares our funds’ performance results with you and offers his comments regarding financial markets. This issue looks at the second quarter of 2025.
ECONOMY
Tariffs, economic growth, and inflation
The tariffs announced on April 2 on exports to the United States from most trade partners created uncertainty around economic growth and inflation prospects. However, a suspension in the implementation of these tariffs was announced on April 9.
Should these tariffs take effect on August 1, 2025, global economic growth could fall short of forecasts. At the same time, inflation might remain high or even intensify, further complicating the plans of central banks seeking to continue lowering their policy rates.
In this context, the global economy could go through a phase of stagflation, defined by economic stagnation coupled with persistent inflation. Such a scenario could lead to a recession, accompanied by significant job losses.
MARKETS
Equities
The economic conditions mentioned above led to strong market volatility in the second quarter. After a significant decline up to April 8, the markets underwent a notable rebound, leading to very positive results for the quarter.
On one side, the MSCI All Country World Index delivered a return of 5.7% (in Canadian dollars), driven especially by the exceptional performance of US stocks tied to artificial intelligence — the so-called “Magnificent 7” — which rose by 21.0% (in Canadian dollars). On the other, the leading Canadian benchmark, the S&P/TSX, posted a very positive return of 8.5%, mainly supported by the strength of gold-related securities and the financial sector.
Bonds
The suspension on the implementation of tariffs led to a sell-off in bonds in favor of equities. This reallocation negatively impacted the bond market: the FTSE Canada Universe Bond Index posted a return of -0.5%.
Furthermore, long-term bonds saw a marked decline, as many investors grew concerned about high debt levels in most countries. As a result, the FTSE Canada Long-Term Bond Index showed an even more pronounced negative return of -2.1%.
REPERCUSSIONS FOR BÂTIRENTE FUNDS
In the first quarter, the Bâtirente Diversified Funds posted positive returns ranging from 1.5% to 4.1%, depending on their risk profile, from the least risky (more bonds) to most risky (more stocks).
Equity Multi Funds
Canadian Equity Multi Fund: 9.3%
Global Equity Multi Fund: 4.2%
Global Small Cap Equity Multi Fund: 6.0%
Fixed Income Multi Funds
Treasury Multi Fund: 0.6%
Bond Multi Fund: -0.4%
2025 OUTLOOK
Volatility expected
Recent reactions in the financial markets suggest that Donald Trump’s presidency could bring increased volatility in the coming years. In such an environment, it becomes challenging to predict which asset classes will perform best. That is why maintaining a well-diversified investment strategy — across both asset classes and geographic regions — remains essential to better face uncertainty.
In a volatile environment, it is crucial to stay focused on long-term financial goals and to make decisions aligned with your investor profile. During market downturns, a periodic investment strategy can be advantageous, allowing you to take advantage of potential dips and benefit from possible rebounds — such as the one that began on April 9.
*Jean-François Dumais has worked as an Investment Strategy Manager at Bâtirente since 2019. Along with a Master of Business Administration (MBA) degree (Finance specialization). He has over 20 years’ experience in financial markets.