Canada is continuing to face significant uncertainty around tariffs as we move into Q3. Canada proposed raising tariffs on steel and aluminum imports from the US, following President Trump doubling the tariffs for Canadian steel and aluminum. However, at the end of June, Canada scrapped their plans to implement a digital services tax (DST) in order to advance trade negotiations with the US. 

The ELCIC pension plan returned 3.4% for the second quarter of 2025, 20 bps behind its benchmark. Since inception of the mandate in March 2025, the total plan has returned 1.91%, 21 bps ahead of its benchmark.  

Canadian Equities 

Canadian equities in the Growth portfolio outperformed their benchmark. Positioning in stocks in the Industrials sector, where some key holdings benefited from strong earnings, was a driver of performance, as was exposure to gold stocks, which continued to capitalize from ongoing safe-haven demand of the precious metal.  

Global Equities 

Global equities in the growth fund underperformed the benchmark despite strong absolute returns in the second quarter. The underperformance was due to the underweight positioning in information technology names, which rebounded in the second quarter, particularly Nvidia. Some exposure to emerging markets and an overweight to the health care sector in the US also detracted from performance. Despite the underperformance in Q2, the global equity portion of the portfolio has outperformed the index by 21 bps since its inception in March 2025.   

Fixed Income 

In the atmosphere of rising yields, bonds generally were weak in Q2. Nevertheless, the universe bond portion of the portfolio outperformed its benchmark over the quarter. An overweight allocation to credit as well as strong duration positioning helped these issues outperform.