Triasima Canadian Equity Strategy Commentary – Q3 2025

The economy

Economies worldwide were on an uncertain path during the third quarter of 2025. In the United States, consumer spending remains resilient, especially among higher income households. Large corporate investments, most notably in artificial intelligence and its supporting supply chain, stimulate overall growth. At the same time, a deteriorating labour market, and tariffs and trade disruptions are weighing on the outlook. These themes are also present in the Eurozone, China, and in Canada. 

While still considering inflation, central banks shifted their focus towards labour market risks. Both the Federal Reserve and the Bank of Canada cut their overnight rates by 0.25% in September, signaling a tilt toward supporting growth and employment. 

Canada’s second-quarter GDP contracted on the back of a sharp decline in exports, and the softness is increasingly evident in the labour market. China faces growing youth unemployment and, like Canada, is also buffeted by the trade war. 

Business activity accelerated from a low level in the Eurozone but is expected to remain weak heading into 2026. Germany, its largest economy, is supported by growing defense and infrastructure spending.

The Canadian equity market

The S&P/TSX Composite Index had a 12.5% return this quarter. Gains were broad-based with resources and growth companies leading.

The Materials sector (38%) was driven by strength in the gold producers subsector (46%), itself propelled by the weak US dollar and growing American fiscal deficits. In Information Technology (13%), fast-growing Shopify (32%) rallied.

Industrials (-1%) were dragged down by Thomson Reuters (-21%) over AI adoption concerns. The Consumer Staples sector (2%) was held back by the defensive food retailers.

The portfolio

The Triasima Canadian Equity Strategy had an 11.7% return this quarter.

Security selection detracted value. Information Technology company Celestica stood out but its positive impact was offset by security selection in the Energy, Consumer Staples and Financials sectors. Sector allocation also had a negative impact, due to the Industrial sector overweight, and the small cash reserve during a strong quarter.  

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

*Securities not held or underweighted in the portfolio.

Adjustments were made to further align the portfolio with the aggressive risk-on environment, mainly by replacing underperforming or defensive holdings with more cyclical ones. Sales included Waste Connections and GFL Environmental in the Industrials sector and three insurance companies in the Financials sector. 

The Three-Pillar Approach™

On the quantitative side, the portfolio has higher profits growth than the benchmark, as well as better risk and expectations parameters. However, it is more expensive.

The Canadian equity market was in as strong uptrend in the quarter and routinely set new all-time highs. Its climb was aggressive and speculative, driven by cyclical industries and with the factors beta, price volatility and earnings variability leading.

The fundamental background to Canadian equities rebounded somewhat following the deterioration of the first half of 2025. Earnings keep on growing, interest rates are stable, and sentiment regarding the negative impact of American tariffs has improved.

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”.) 

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.