June 2025 - Monthly Update

 

Hi ,

 

Hope this note finds you and your family well as we look forward to summer.

 

Your portfolio posted gains in May. It remains with positive performance over the past twelve months.

 

North American investment markets recovered consistently as the month wore on. While there has been no resolution to the uncertainty around tariffs and the impact on the global economy, these issues are no longer new as far as investment markets are concerned. With the passage of time, volatility has declined, and equilibrium returns to the system.

 

The growth and dominating scale of the technology sector has been one of the enduring trends of the last decade.

 

Over the last three years, one of the trends to evolve out of this has been the extension and application of technology into the wider economy. Within the private sector, this is the opportunity to access and apply technology to a business to be better. What’s more, the cost of these productive technologies is a fraction of what it once was.

 

When leaders are evaluating where to invest money, one of the metrics they use is called the payback period. How long will it take for this investment to generate enough additional return to pay for itself after which the benefit is entirely accretive to gains for the business.

 

In the past, a payback period of six or seven years would be acceptable to go ahead with the spend for the project. With the advances of the technology sector, payback periods are now being measured in months, not years. This widespread access and application of technology extends beyond artificial intelligence from cloud-based computing to advance manufacturing robotics and more.

 

We are using this trend as a filter around portfolio construction to identifying businesses that are successfully applying all range of technologies to their existing platform as a competitive advantage. Participating in this enduring trend yields businesses that are leaders in innovation, scalability and efficiency while bringing new products and services to market sooner. Over time, these businesses become worth more as a result.

 

All within the context of three pillars of successful portfolio construction: quality, true diversification, and intentionality of what we own and what we do not.

 

Our investment strategy is unchanged, and we continue to focus on businesses with exposure to the domestic North American economy. You and your wealth are in a strong position.

 

The view from Brian Belski, BMO’s Chief Investment Strategist:

“Following three consecutive monthly losses, the S&P 500 rebounded sharply during May – its best monthly performance since November 2023, and best May performance in 35 years. This performance pushed the S&P 500 back into positive year-to-date territory... Not surprisingly, tariff headlines were the driving force as the US and China deescalated their trade war with an agreement to pause the effective embargo that was previously in place for 90 days. While this news was certainly a sigh of relief for the market, a high level of uncertainty remains, in our view, and especially considering how fluid the trade rhetoric has become in recent weeks. Therefore, while we still believe the path of US stocks remains higher for the rest of the year, we expect it to be a bumpy one and expect future gains to be somewhat limited until there is greater clarity on the tariff front – one way or another… The S&P/TSX gained … in May, underperforming the S&P 500 for the first time this year. On a sector return basis, the market clearly shifted back to a more cyclical orientation market and away from the more defensive sectors that have been outperforming over the last few months. Indeed, Technology, Industrials and Consumer Discretionary were the best performing sectors this month, while Utilities and Consumer Staples were among the worst performing sectors. From our perspective, this is a clear acknowledgement by the market that economic and market risks around trade are fading, which we believe will continue to favour these more cyclical areas and ultimately US equities. While we have started to neutralize our Canadian overweight, we continue to believe that Canada remains a relative value play with a rebounding growth profile.” Portfolio Strategy – June 2025. BMO Capital Markets.

 

• Stocks in your portfolio that made a new 52 week high this past month: Fortis*, MasterCard*, (Sun Life*), TD Bank*, Thomson Reuters*, Waste Management*

• Stocks in your portfolio that made a new 52 week low this past month: Kraft, United Health

• The Loonie gained half a cent versus the U.S. dollar to $0.73

 

Thank you,

Ian, Gab, Kaitlyn, Naina, and Meeral