Performance Update

Performance for the BCV Balanced Income Fund has remained solid over the course of the year, delivering an 11.1% return year-to-date. During the third quarter, the fund experienced a minor consolidation, returning (0.2%). This occurred within a market environment where broader North American equities posted modest gains, with the S&P TSX Total Return at 1.6% and the S&P 500 Total Return at 2.3% for Q3.

Our equity allocation posted a slight (0.2%) decline for the quarter, but its year-to-date performance remains  at 15.9%. This quarter highlights the value of holding a diverse mix of investments. For example, our technology holdings, notably Microsoft and Meta Platforms, saw increasing growth of 37.8% and 21.8% respectively. Building on the energy and inflation themes from earlier in the year, our Canadian energy companies (like Whitecap Resources and Canadian Natural Resources) also continued to deliver value, acting as a growth engine for the portfolio. Our allocation to gold provided a defensive lift, rising 16.4%. This is exactly what we believe gold is designed to do, acting as a reliable hedge to help protect your wealth when the macroeconomic environment becomes uncertain.

Naturally, not every sector rises at the same time. On the other side of the ledger, some of our utility, infrastructure, and physical economy holdings (such as Brookfield Renewable Partners, Capital Power, and TFI International) faced headwinds and gave back some of their recent gains. However, it is important to keep this in perspective, as the majority of these companies are still showing positive returns for the year. Short-term pullbacks are normal, and we believe these remain high-quality, reliable dividend paying businesses that we are holding for the long term.

On the fixed income side of the portfolio, our bonds returned 0.8% for the quarter, nicely outperforming the broader Core Canadian Universe Bond Index, which declined 3.1% over the same period. Year-to-date, our fixed income allocation maintains a 2.5% return, comparing favourably to the broader index’s (0.2%) decline. Additionally, our alternative investments provided positive stability during the recent quarter, with the BCV Multi Strategy Alternatives Fund gaining 2.2% in Q3 and 5.8% YTD.

As we enter the final months of the year, we remain focused on navigating evolving economic conditions by prioritizing balance sheet strength, sustainable dividends, and diligent risk management. Looking beyond our portfolio positioning, the broader macroeconomic landscape continues to be shaped by shifting global interest rate dynamics and central bank policy paths, which we are closely monitoring to assess how these evolving dynamics will shape market opportunities in the coming quarters.

For a deeper dive read this quarter’s Blue Chip Report written by members of our Investment Committee.