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Q2 investment update 📈 Chaos to comeback

Equity markets had a rocky April, then rebounded to an all-time high. Let’s break it down.

July 18, 2025

Written by Ariel Teplitsky, reviewed by Michael Allen

Illustration of a cable car with the Tangerine logo on it navigating between two high mountain peaks.

Key takeaways

  • Global trade tensions sent markets spiraling—but then they snapped back.
  • Canadian and international equities outperformed the U.S. in April and May, a win for diversification.
  • Declines are more common than you’d think, but markets are resilient.
  • The good times have kept on rolling for our economy, but there are signs of slowing down.

Q2 investment update: Chaos to comeback

Remember that early April market chaos? No? Good. That means you were doing investing right—that is, not panicking.

If you’re enjoying patio season right now or planning your next escape, it may be hard to remember how markets so recently threw a tantrum. We’re talking trade war headlines and stock dives. But just like a celebrity romance, things changed fast.

Now let’s give the quarter (April 1 to June 30) the spotlight it deserves—chaos, comeback and all.

Zoom In | Portfolio performance

The dip didn’t stick 😬 âžĄïž 😌

Global trade tensions were top of mind in early April, sending markets down sharply. But in a few short weeks, stocks snapped back.

Our Equity-focused Portfolios rebounded strong, while those with more bond exposure saw less volatility1.

A graph showing the performance of Tangerine Portfolios over a three-month and one-year period.

See historical performance here

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It’s been a strong period for Canadian and international equities, proving again that a globally diversified portfolio is not just a nice-to-have but a strong investment strategy. (You may hear us talk about this a lot in these updates.)

The S&P/TSX Composite Index rose 8.53% in the quarter and 10.17% year to date (up to June 30) — great news for your Canadian investments.

The MSCI EAFE Index, which tracks a basket of equities from developed countries outside the U.S. and Canada, posted a formidable 5.97% return for the quarter and 13.3% year-to-date (as at June 30). Yes, the international component of your portfolio was working overtime this quarter.

Meanwhile, in the U.S., the S&P 500 Index rebounded from its April low, boosted by tech giants such as Nvidia and Microsoft2 — reaching a new record by June 30. The index grew 5.18% for the quarter and 0.76% year to date.

💡Investor insight | Automating your investments

“Battered stock markets continue slide” –Toronto Star, April 5

“TSX hits record high”
–BNN Bloomberg, May 16

Yikes, right? When you saw the news in early April, your first instinct may have been to pull back—or yank your money out altogether. But then you would’ve missed all the good stuff that followed.

Emotion-led investing rarely wins. Instead, automate it. Set up pre-authorized contributions to keep your strategy steady with dollar-cost averaging. It’s consistency over chaos—and a smarter way to ride the waves.

Zoom Out | Getting down with the markets 💃

Everyone wants to protect their investments. But here’s a little secret: market declines are par for the course—and they happen more often than you’d think.

📚 Quick history lesson: The U.S. stock market pulls back by about 13% every year, on average, before it recovers3. Even a steep drop of 20% or more tends to happen every three or four years!

Size of decline

Frequency

5% or more

3 to 4 times per year

10% or more

Once per year

15% or more

Once every 2 years

20% or more

Once every 3 to 4 years

Size and frequency of median equity declines on the S&P 500, on average, from 1928 to May 31, 2025. Source: 1832 Asset Management L.P.

But markets are resilient, and over time they’ve bounced back4.

That’s why smart investing is less about market acrobatics and more about how you react to it. Are you:

a) panicking and cutting your losses whenever there’s a “correction?” Or

b) riding out the valley until it peaks again, while focusing on your long-term goals?

Keep in mind how much you could stand to earn by staying invested for the best-performing days—and how much you’d stand to lose.

More cautious investors may consider one of our Balanced Portfolios, which are less concentrated in stocks and considered low-to-medium risk.

🌎 Global markets

  • Stock performance: International and Canadian equities outperformed the U.S. in April and May.
  • What this means: Diversification for the win! Global diversification, a key strategy of Tangerine Portfolios, quietly did its job.

🇹🇩 Canada’s economy

The Big Question

With Michael Allen, Head of Investments

Q: Looking back on this year’s economic uncertainty, is there anything you would’ve done differently?

A: Well, you know what they say about hindsight being 20/20? My wife and I invested our 2025 TFSA and RSP contributions in early January—not ideal timing, as it turns out! If I’d had a crystal ball, we would have done it in April instead.

But markets are unpredictable, and tariffs hit harder than expected. I still believe in investing early—this experience doesn’t change that. Like everyone else, I felt the volatility in real-time. We’re in this together.

💌 Ask Mike a Big Question

đŸŽ„ Watch: Michael Allen explains what’s different about investing at Tangerine

The short of it

Stay invested, stay calm and let the markets do the heavy lifting. Catch you next quarter 👀

Ready to start investing?

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Investing is about building the future you want for yourself, and our team of Tangerine Advisors are here to help. Clients are encouraged to reach out at 1-877-464-5678 Monday to Friday from 8 am to 8 pm ET.

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

2 Holdings are not buy/sell recommendations

3 By average, we’re referring to the midpoint of the maximum drawdown, or potential loss, for the S&P 500 index each calendar year from 1928 to May 31, 2025. Source: 1832 Asset Management L.P.

4  Past performance is not indicative of future returns.

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.