Investment Climate Review

Tablet with stock market graph sitting on a table with a tea cup and cell phone

It was only three months ago that investors were licking their financial wounds from the stock market fall in December; however, by the end of the first quarter, markets around the world had recovered a significant portion of the losses. Interestingly, the TSX only had a correction as it did not fall 20% or more – it fell -16.9%. Both the US and international markets briefly entered into bear market territory, with the S&P 500 falling 20.9% and the MSCI EAFE falling 22.9% from their highs.

As of the time of writing, the S&P 500 is less than 33 points away (about 1.1%) of setting a new high and officially ending the bear market; the TSX is also within less than 57 points (about 0.3%) of setting a new high. Such a fast recovery from the lows is definitely not the norm. According to CNBC, since WWII, the average bear market for the S&P 500 had a loss of 30.4% and took nearly 22 months to recover. It may be fitting that after coming off the longest bull market in history the S&P 500 could potentially have one of the shortest bear markets in history – only time will tell.

Asset ClassQ1 Return, C$
Canadian Equity13.3%
US Equity11.6%
International Equity7.7%
Emerging Market Equity7.6%
Canadian Real Estate15.8%

Global Real Estate


March 31 Close

Q1 Change

Canadian Dollar

$0.7503, 2.1%

Gold, USD

$1,298.50, 1.3%
Gold, CAD$1,730.64, -0.7%
Oil, USD$60.14, 32.4%
Alt Fixed Income FundsQ1
Canadian Bonds3.9%
Trez Capital Yield US2.0%
Qwest Productivity Media1.8%
Cortland Credit1.4%
Stewardship Alt Income1.5%


The S&P/TSX Composite was the best performing broad equity market this quarter and gained a healthy 13.3%; Canadian growth stocks surged ahead 13.8%, followed by large cap at 12.5%, value returned 12.3% and small cap was up 10.7%.

United States

Equities south of the border rose 11.6%, with small caps rising 13.7% and value up 9.5%, all in CAD terms. A stronger Canadian dollar reduced US market returns, which were up 14.1%, 16.2% and 11.9%, respectively, in USD.

International & Emerging Markets

International and emerging markets equities were up 7.7% and 7.6%, respectively in Q1, all in CAD. International growth (up 9.7%) and small caps (up 8.3%) were the strongest performing factors in Q1.

Real Estate

Strength in real estate continued again this quarter with Canadian REITs as the strongest sub-asset class, up 15.8%, followed by international real estate up 12.1%.

Fixed Income

Canadian bonds had a very strong quarter, up 3.9%. The upward trend in interest rates has paused as Canada’s economic outlook has softened with expected GDP growth in 2019 at 1.4% down from 2.0% just three months ago; this may provide some further near-term strength in traditional bonds


Strength in gold spilled over from Q4, however, by the end of Q1, gold was pulling back from its high. Overall it was up 1.3% in USD this quarter but fell -0.7% in CAD terms.

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