Second Quarter 2025 Newsletter
- catherine2042
- Aug 5
- 2 min read
Market Commentary
After stumbling in the first quarter in response to tariff war uncertainty, global equity markets rallied substantially in the second quarter and many stock market indices have achieved all-time highs yet again. Non-equity asset classes performed strongly in unison. We’ll take the gains and stability for now but we’re confident that more volatility lies ahead as the markets digest the economic effects of tariffs and the impact on the GDP, employment, inflation, interest rates, etc.
Here are the key quarter and YTD highlights:
Equities
S&P 500: +10.78% / +6.05%
TSX 60: +7.60% / +9.43%
Global Equities: +5.02% / +3.68%
Bonds
US Bonds: +1.27% / +4.05%
Canadian Bonds: -0.59% / +1.41%
High Yield: +3.80% / +4.76%
Balanced Portfolios
Global 60/40: +3.38% / +3.94%
We maintain our view that structurally higher interest rates and possible reemergence of inflation are real risks to the global economy. Our marching orders remain unchanged – we build resilient portfolios equipped to handle all types of storms in order that families can reach their financial goals with confidence.
Fortress Portfolio Positioning and Outlook
The Anchor Pacific Fortress Portfolio is designed to deliver a reliable highly confident outcome over a long-term investment horizon and provide resilience in the face of evolving market challenges across multiple market cycles. Discipline, consistency and adaptability remain at the heart of our investment process.
During the second quarter, we maintained our core asset allocations after shifting our equity geographic exposure from an overweight to US listed companies back to a more balanced weighting in the first quarter.
There were no other material changes of note to our allocations over the course of the second quarter as we absorbed and monitored our previous quarter’s equity geographic exposure shift from an overweight to US listed companies back to a more balanced weighting.
Our present asset allocation for the Fortress Balanced Model Portfolio is below.
Closing Thoughts and Looking Ahead
Moving forward, the key themes likely to drive portfolio risk and performance remain largely unchanged:
Tariff related economic uncertainty
Higher global cost of capital
Elevated stock and bond correlations
Stretched equity valuations
Above-trend inflation
Attention to and management of these potential risks continue to guide our process of positioning your portfolios to generate consistent positive returns while protecting capital on downside.
We remain unwavering in our commitment to providing you with intelligent, resilient, and diversified portfolios. While there are always challenges to overcome, we are always optimistic about the future and confident in our ability to help you navigate today’s financial landscape.
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