December 31, 2025
Commentary
Year-to-date to December 31, 2025, the Ninepoint Balanced+ Fund generated a total return of 15.50% compared to a 60/40 TSX Composite TR/XBB Blend, which generated a total return of 19.48%. For the month, the Fund generated a total return of -0.09% while the Index generated a total return of 0.32%.
NINEPOINT BALANCED+ FUND - COMPOUNDED RETURNS¹ AS OF DECEMBER 31, 2025 (SERIES SF NPP1033) | INCEPTION DATE: MARCH 7, 2024
1M |
YTD |
3M |
6M |
1YR |
INCEPTION |
|
|---|---|---|---|---|---|---|
FUND |
-0.09% |
15.50% |
4.32% |
11.30% |
15.50% |
13.91% |
INDEX |
0.32% |
19.48% |
3.59% |
11.88% |
19.48% |
17.63% |
The second half of 2025 was a far more normal environment than the first half of the year. But looking back on the past twelve months, it was a wild year for equity investors, with generally solid returns for the major indexes despite some serious volatility underneath the surface. In hindsight, the year was a difficult one for many active managers, with two significant whipsaws (triggered by the announcement of DeepSeek and “Liberation Day”) that proved tricky to navigate. Further, the traditional “Santa Claus rally” failed to materialize, although widely anticipated, which was disappointing.
But despite all the chaos in the world, investors were willing to allocate capital to stocks around the world, as the worst-case scenarios failed to play out, and markets approached all-time highs by the end of December. Importantly, revenue and earnings growth were the key drivers of equity performance and, if the fourth quarter comes in line with expectations, the S&P 500 should report year-over-year revenue growth of 7.2% and year-over-year earnings growth of 12.4%. For fiscal 2026, consensus estimates are calling for revenue growth of 7.3% and earnings growth of 14.9%, suggesting another year of double-digit returns at the index level (according to FactSet).
Accommodative monetary policy also helped to drive equity markets higher, with the US Federal Reserve cutting interest rates three times down to a target range of 3.50% to 3.75% and the Bank of Canada cutting the overnight interest rate four times down to 2.25%. Today in the United States, the forward curve is currently pricing in at least two more rate cuts in 2026, which should offer some downside support if the labour market or economic growth outlook deteriorates. Finally, deregulation and tax reform are potential future tailwinds for equities through 2026.
Admittedly, valuation remains an issue, with the current forward 12-month P/E at 22.2x, well above the 5-year average of 20.0x and the 10-year average of 18.7x (again according to FactSet). But revenue and earnings growth of the largest stocks in the S&P 500 (primarily in the Communication Services and Information Technology sectors) remain significantly above the market average, which bodes well for continued strength into 2026. Whether the AI-trade can continue to power the market higher or a rotation to more cyclical, value-oriented sectors can happen will be the key debate in the coming months.
Top contributors to the year-to-date performance of the Ninepoint Balanced+ Fund by Fund included the Ninepoint Gold and Precious Minerals Fund, the Ninepoint Energy Fund, and the Canadian Large Cap Leaders Split Corp, while the Ninepoint Global Macro Fund and the Ninepoint Global Select Fund detracted from performance on an absolute basis.
Our current target capital allocations, by underlying weights, are as described in the table below:
Target Capital Allocations
With a fresh start to the year, the Manager believes that an easier monetary policy should broaden participation in the equity market rally through 2026. In the meantime, the Manager remains focused on constructing a diversified tactical balanced fund using various asset classes that have low correlation to each other to improve portfolio's overall risk adjusted returns.
Jeff Sayer, CFA
Ninepoint Partners