Triasima Canadian Equity Strategy Commentary – Q3 2026

The economy

Economic growth remained average and steady in the United States over the third quarter, supported by spending by households and for infrastructure building. It reaccelerated in Canada after a poor first half of 2026. The labour market stayed balanced.

The war in Iran and the fight over the Strait of Hormuz lingered on, pushing up energy prices, with inflation following suit. This situation, combined with concerns over American budgetary deficits and trade uncertainties, has led to large increases in interest rates of all maturities. 

Central bankers took notice and some, notably those of the United States, Europe, and Japan, reversed their accommodating stance and lifted their benchmark rates. The Bank of Canada stayed put.

European economies suffer from the higher energy prices and inflation, and governments are using fiscal stimulus to offset the effects. In China, the technology sector is booming, partially offsetting poor consumer and infrastructure spending.

The Canadian equity market

The S&P/TSX Composite Index had a 1.6% return this quarter.

The market had a two-speed tone. The Information Technology (18%) and Materials (13%) sectors led by a large margin, while eight of the other nine sectors had negative returns. 

Shopify (+30%) drove the gain in the Information Technology sector. The Materials sector gained as gold prices surged alongside higher inflation and the announcement of bond buybacks by the American Treasury Department. 

The laggards were the rate-sensitive sectors. Communication Services (-9%), Utilities (-7%), and Real Estate (-7%) each fell as interest rates surged.

The portfolio

The Triasima Canadian Equity Strategy had a 0.0% return this quarter.

Sector allocation detracted value due to an underweight position in the Materials sector, namely the gold producers, but was partially offset by security selection. Security selection detracted value overall, especially within the Industrials and Information Technology sectors.

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

*Securities not held or underweighted in the portfolio.

The Energy sector was pared back through the sale of pipelines and uranium producer Cameco Corp. The underweight in the Materials sector and in gold and silver producers was reduced. The Information Technology sector was also added to by reducing the underweight in Shopify and adding to software provider Constellation Brands.

The Three-Pillar Approach™

On the quantitative side, the portfolio has superior profitability and expectations parameters, and higher revenue and earnings growth. 

The Canadian equity market repeatedly set new highs in the first two months of the third quarter, but its uptrend weakened afterwards. An eclectic mix of Value, Profitability, and Volatility style factors outperformed.

The fundamental outlook deteriorated somewhat during the quarter due to the general rise in interest rates, higher oil prices and inflation. Resilient economic growth and growing profits are partial offsets.

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”.) 

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