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Q1 investment update 📈 Navigating change

April 25, 2025

Written by Ariel Teplitsky, reviewed by Michael Allen

Key takeaways

  • The first three months of this year were packed with events that affected global markets.
  • Portfolios with equity investments that were more globally diversified performed better in the first quarter, since they have less exposure to the U.S. stock market and more exposure to the better-performing European and Asian markets.
  • Historically, a globally diverse strategy across multiple asset classes can provide more stable returns over time.

Q1 investment update: navigating change

In just the last few weeks, so much has changed. The stock markets have swung wildly due to tariff uncertainty, and we know you might wonder how this affects your finances. We’re here to help you put recent events in perspective. 

Illustration of a barometer with the word “change” in the middle. On the left side are clouds with the words “tariffs” and “inflation.” On the right is a sun with the words “diversification” and “growth.”

This quarterly update, which covers January 1 to March 31, can help you consider the big picture – your Portfolio returns over a longer period of time – while setting your sights on your financial goals ahead. 

The quarter at a glance

 

Jan. 1, 2025

March 31, 2025

Change

Bank of Canada policy interest rate

3.25%

2.75%

Down 15%

Annual rate of inflation (Consumer Price Index)

1.9%

(January 2025)

2.3%

(March 2025)

Up 21%

Value of loonie

$0.695 US

$0.696 US

Up 0.09%

Value of S&P/TSX Composite stock index

24,727 points

24,917 points

Up 0.77%

Nasdaq Composite Index

19,310.79 points

17,299.29 points

Down 10.4%

Value of 1 Tesla share

$403.84 US

$259.16 US

Down 35.8%

 

Zoom in | Portfolio performance

The first three months of this year were packed with events that affected Canadian and international markets. We’ve seen large changes in government, multiple interest rate cuts and, of course, the onset of tariffs, all of which have been having a big impact on market dynamics.

Graphs showing the first quarter returns of Tangerine Investment Portfolios in 2025 compared to the 1-year returns, as at March 31, 2025.

Portfolio performance as at March 31, 2025. Source: 1832 Asset Management L.P. Past returns are not indicative of future performance.

See historical performance here

Between January and March, Tangerine’s Core Portfolios led the pack. This is because they have less exposure to the U.S. stock market – which took a hit in the first quarter following last year’s gains – and more exposure to the better-performing European and Asian markets.

The Equity Growth Core Portfolio, for instance, is equally divided between Canadian equity, U.S. equity, and international equity. It provided a return of 1.50% over three months, and 13.54% over a one-year period.

💡 The power of diversification*

By investing in Portfolios that spread out your money across different asset classes, countries, industries and company sizes, you may smooth out some of the short-term fluctuation that comes with investing. Historically, a globally diverse strategy can provide more stable returns over time.

 Zoom out | A certain amount of uncertainty

The early months of Donald Trump’s second presidential term have been characterized by an extraordinary amount of unpredictability, which has caused the markets to cool off from their recent highs.

While 2025’s tariff fears are new, volatility is not, so it helps to recall what happened every other time the stock market “corrected” from a recent high.

Remember the 2008 financial crisis, or the pandemic-fueled slump in early 2020? Even after the most significant drops, markets tend to bounce back stronger over time. In both cases, investors who panicked and pulled their money when stocks bottomed out could have missed out on the gains that followed.  

Chart showing the hypothetical growth of $1,000 invested in a U.S. equity index over 30 years beginning at Dec. 31, 1995, and held to March 31, 2025, where it reaches $22,030.

Source: Morningstar. This chart shows the inferred growth of $1,000 that was invested at December 31, 1995 and held to March 31, 2025, for illustrative purposes only. The hypothetical U.S. equity portfolio is composed of 100% S&P 500 TR Index. Returns are calculated in Canadian currency. Indices are not managed, and it is not possible to invest directly in an index. This assumes the reinvestment of all income and no transaction costs, fees, or taxes.

The tendency of markets to recover can be seen in our Investment Portfolios. While returns can vary from one season to the next, over the past one, two and three years, as of March 31, 2025, all Tangerine Portfolios have achieved positive returns, while our original Core Portfolios have maintained their gains over the past five and 10 years.

👉 It’s important to stay invested, and we're here to keep you informed and help you stick to your plan through the ups and downs of market cycles. Explore simple tips and strategies for managing your money in any market.

The Big Question

With Michael Allen, Head of Investments

Q: I want to “buy Canadian.” Should I stop investing in other countries?

A: “Short answer? No. Understandably, you may want to use your dollars to support Canadian businesses in this challenging time. Shop local but invest global. If you’re looking to grow your money over the long term, investing in a globally diversified portfolio has historically protected against market fluctuations. This is how I approach investing for my family.”

Looking ahead

We don't know what the rest of 2025 will bring, but we’re here to help you through it. If you’re unsure that you’re invested in the Portfolio(s) best suited for your needs, our team of Investment Funds Advisors are here to help.

Tangerine Investment Clients can give us a call at 1-877-464-5678 Monday to Friday from 8 a.m. to 8 p.m. ET, or log in at tangerine.ca, select your Investment Account and then click “Investor Profile.”

No matter what happens, we are sure of one thing: there will be change.

*Diversification does not guarantee a profit or eliminate the risk of loss.

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This article or video (the “Content”), as applicable, is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this content, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and Tangerine Bank is not responsible to update this information. References to any third party product or service, opinion or statement, or the use of any trade, firm or corporation name does not constitute endorsement, recommendation, or approval by Tangerine Bank of any of the products, services or opinions of the third party. All third party sources are believed to be accurate and reliable as of the date of publication and Tangerine Bank does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.

Tangerine Investment Funds are managed by 1832 Asset Management L.P. Tangerine Investment Funds Limited is the principal distributor of Tangerine Investment Funds. Tangerine Investment Funds Limited and 1832 Asset Management L.P. are wholly owned subsidiaries of The Bank of Nova Scotia. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.