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Quarterly Aviator Portfolios® update

What happened in financial markets during Q3 2023?

Stock and bond markets*

INDEX CLOSE Q3 YTD
S&P/TSX Composite 19,541.27 -3.05% 0.81%
Dow Jones Industrial Average 33,507.50 -2.62% 1.09%
S&P 500 Index 4,288.05 -3.65% 11.68%
NASDAQ Composite 13,219.32 -4.12% 26.30%
10-year Canadian Bond Yield 4.09% 0.83% 0.79%
10-year U.S. Treasury Yield 4.59% 0.78% 0.71%
WTI Crude Oil (US$/barrel) $90.79 28.52% 13.12%
Canadian Dollar US$ 0.7365 -2.48% -0.18%
Bank of Canada Prime Rate 7.2%

*Performance ending September 30, 2023. Sources: Bloomberg.

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How Aviator Portfolios® performed during Q3 2023

In Q3, the equity and fixed income markets were both under pressure leading to broad-based declines across sectors. In most cases, Aviator Portfolios® kept pace with their relative benchmarks, but overall performance was negative. The Franklin High Income Fund, the Commercial Mortgage Fund and the Concentrated Canadian Equity Fund were the top performers in the quarter.

Note: Rates of return for each portfolio are provided on an after-fees (net) basis. Given that fees are only applied at the portfolio level, all references to underlying fund performance are before fees (gross).

Co-operators Aviator® Income Plus Portfolio: low risk

Designed to achieve interest income, and the preservation and moderate growth of capital, with low levels of volatility.

Commercial mortgages, representing 15% of the overall portfolio weight, were the largest upside contributor in Q3. Canadian fixed income assets were the largest downside performer, followed by international equities.

aviator-income-plus-portfolio-investment-segmentation-pie-chart
Investment Segmentation
  • Canadian Fixed Income 61.85%
  • Canadian Equity 15.52%
  • Foreign Fixed Income 9.92%
  • Cash & Other Net Assets 5.42%
  • U.S. Equity 4.56%
  • International Equity 2.73%
Rates of Return
Series 100
Guarantee Level

Q3

1 year 3 year Since inception
Dec. 2, 2019
75-75 -2.04% 1.76% -1.58% -0.33%
75-100 -2.08% 1.60% -1.74% -0.50%
Rates of Return
Series 500
Guarantee Level Q3 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 -1.98% 1.98% -1.37% 0.73% 0.82%
75-100 -2.02% 1.82% -1.53% 0.57% 0.65%
Top 10 holdings
Co-operators Corporate Bond Fund 25.00%
Co-operators Canadian Fixed Income Fund 20.01%
Co-operators Commercial Mortgage Fund 14.98%
Co-operators Preferred Share Equity Fund 9.99%
Co-operators Global Equity Fund 7.51%
Co-operators Templeton Global Bond Fund
5.04%
Co-operators Franklin High Income Fund 5.01%
Co-operators Bissett Short Duration Bond Fund 5.00%
Co-operators Bissett Canadian Equity Fund
4.97%
Co-operators Concentrated Canadian Equity Fund 2.49%
The top 10 investments make up 100.00% of the fund.
Total number of investments: 10

Co-operators Aviator® Diversified Portfolio: low to moderate risk

Designed to achieve both interest income and capital growth, with modest levels of volatility.

Foreign fixed income and commercial mortgage funds were the top contributors to performance in Q3. Canadian fixed income allocations, which account for the largest weight within the portfolio, dragged on performance.

aviator-diversified-portfolio-investment-segmentation-Pie-Chart
Investment Segmentation
  • Canadian Fixed Income 29.08%
  • Canadian Equity 27.58%
  • U.S. Equity 18.15%
  • Foreign Fixed Income 11.02%
  • International Equity 8.49%
  • Cash & Other Net Assets 5.68%
Rates of Return
Series 100
Guarantee Level Q3 1 year 3 year Since inception
Dec. 2, 2019
75-75 -2.18% 4.07% 1.80% 1.52%
75-100 -2.22% 3.90% 1.64% 1.31%
Rates of Return
Series 500
Guarantee Level Q3 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 -2.13% 4.30% 2.03% 1.79% 2.07%
75-100 -2.17% 4.13% 1.86% 1.62% 1.90%
Top 10 holdings
Co-operators Canadian Fixed Income Fund 17.52%
Co-operators Global Equity Fund
12.52%
Co-operators Commercial Mortgage Fund
12.49%
Co-operators Concentrated Canadian Equity Fund 12.44%
Co-operators Preferred Share Equity Fund 9.99%
Co-operators Franklin High Income Fund
7.52%
Co-operators Bissett Canadian Equity Fund 7.46%
Co-operators Small-Cap U.S. Equity Index Fund
7.46%
Co-operators Fidelity Global Real Estate Fund 5.04%
Co-operators Templeton Global Bond Fund 5.04%
The top 10 investments make up 97.48% of the fund.
Total number of investments: 11

Co-operators Aviator® Growth Portfolio: moderate risk

Designed to achieve long-term capital growth, with some interest income.

The positive performance of foreign fixed income assets helped mitigate losses in Q3. Canadian equities also had a strong quarter relative to the overall market conditions. Real estate and international equity holdings were negative contributors.

aviator-growth-portfolio-investment-segmentation-pie-chart
Investment Segmentation
  • Canadian Equity 28.53%
  • U.S. Equity 26.79%
  • Canadian Fixed Income 13.30%
  • Foreign Fixed Income 13.21%
  • International Equity 12.88%
  • Cash & Other Net Assets 5.29%
Rates of Return
Series 100
Guarantee Level Q3 1 year 3 year Since inception
Dec. 2, 2019
75-75 -2.12% 5.64% 3.20% 2.04%
75-100 -2.16% 5.47% 3.03% 1.82%
Rates of Return
Series 500
Guarantee Level Q3 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 -2.06% 5.87% 3.43% 1.90% 2.34%
75-100 -2.10% 5.70% 3.26% 1.74% 2.17%
Top 10 holdings
Co-operators Global Equity Fund 17.53%
Co-operators Concentrated Canadian Equity Fund 12.93%
Co-operators Fidelity Global Real Estate Fund
10.08%
Co-operators Franklin High Income Fund
10.03%
Co-operators Bissett Canadian Equity Fund 9.94%
Co-operators Small-Cap U.S. Equity Index Fund 9.94%
Co-operators Commercial Mortgage Fund 8.49%
Co-operators Preferred Share Equity Fund 7.49%
Co-operators Templeton Global Bond Fund 5.04%
Co-operators Corporate Bond Fund
5.00%
The top 10 investments make up 96.47% of the fund.
Total number of investments: 11

Key take-aways

Inflation and interest rates – the economic headwinds that had the biggest impact on markets through the first half of the year – continued to sway sentiment in the third quarter. Unlike the year’s first two quarters, all four of the major North American equity indexes closed with negative returns. The Nasdaq, which is heavily weighted toward tech stocks (typically the most sensitive to interest-rate changes), fared the worst, declining 4%. Canada’s TSX, which fell 3.7% in September, ended 3% down for the quarter. Bond yields rose (and prices fell) as market expectations for interest rates to remain higher for longer solidified, and weighed heavily on fixed income investments.  

Having professionally managed investments as part of your financial roadmap is both comforting and valuable in reaching your long-term goals. The investment fund managers we partner with have been through market uncertainty before. They understand the market, are equipped with sound strategies and take an approach that’s designed and proven to outlast volatility. If you have questions, a Co-operators financial representative is always ready to help.

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Sales charges, expenses, and other fees

Fees and expenses reduce the return on your investment. For details, please refer to your Policy and Information Folder.

Current rates of return are available on our Segregated Fund Performance page. Your personal rate of return will vary, depending on the contributions and withdrawals you make over time. For details, please refer to your Policy Statement.

If you have questions about your investments, contact your Co-operators financial representative.

Aviator Portfolios® are a secure and diversified investment option

Co-operators Aviator Portfolios® – expertly designed and constructed by the highly regarded investment managers at Addenda Capital® and Franklin Templeton® – provide investors with broader diversification opportunities.

Each of the three distinct Aviator Portfolios® funds brings an opportunity to invest your hard-earned savings alongside some of Canada’s largest institutional clients, including pension funds, foundations, endowments, governments and corporations.

Aviator Portfolios® provide both regional and risk diversification, including exposure to unique asset classes, such as commercial mortgages, preferred shares and high-yield bonds, all of which behave differently than stocks.


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ABOUT THIS UPDATE: The commentary in this report is based on current market conditions and market media sources available to the public and may change without prior warning at any time. The forecasts provided herein are not guarantees of future performance and include risks, uncertainty and assumptions. While Co-operators Life Insurance Company (“Co-operators”) believes these assumptions are reasonable, there is no guarantee they will be confirmed. This report is not a guarantee of future investment performance, nor should undue reliance be placed on this report. This report is provided as a general source of information for a specific point in time and should not be considered solicitation to buy or sell any investment. Nothing contained in this report constitutes investment, legal, tax or other advice. The content in this report should not be relied upon in making an investment or other decision, and individuals should obtain relevant and specific professional advice and read the terms and conditions contained in the relevant offering documents carefully before any investment decision is made. Co-operators is not responsible for any loss or damage as a result of reliance on the information contained in this report. Co-operators makes no representations or warranties as to the information contained herein and does not guarantee its accuracy, timeliness, completeness or usefulness. Co-operators is committed to protecting the privacy, confidentiality, accuracy and security of the personal information that we collect, use, retain and disclose in the course of conducting our business. Please visit cooperators.ca/privacy for more information. Co-operators®, Aviator Portfolios®, and Co-operators Aviator® are registered trademarks of Co-operators Group Limited and are used with permission. Investing in your future. Together.TM is a trademark of Co-operators Group Limited. Addenda Capital® is a registered trademark of Addenda Capital Inc. and is used with permission. Franklin, Templeton, Franklin Bissett and Franklin Templeton® are registered trademarks of Franklin Templeton Investments Corp. and are used with permission. Aviator Portfolios® and Co-operators Aviator® are investment products offered by Co-operators Life Insurance Company, which may include features or options such as segregated funds, portfolios of segregated funds or guaranteed rates. Guaranteed benefits are payable upon death or upon maturity (reduced proportionately by withdrawals from, or investment transfers out of, the segregated funds). No guarantee is provided upon surrender or cancellation. Subject to any applicable death and maturity guarantee, any part of the premium or other amount that is allocated to a segregated fund is invested at the risk of the policyholder and may increase or decrease in value. Ask your financial representative for details. Segregated funds and annuities are underwritten and administered by Co-operators Life Insurance Company. Not all products are available in all provinces. © 2023 Co-operators Life Insurance Company.

If you have questions or want to discuss your investments, please contact your authorized financial representative.

Returns, investment segmentation and top holdings as of  September 30, 2023. Rates of return for periods less than one year are simple rates of return. All others are annualized rates of return. Securities regulations do not allow us to report performance for a fund that has been available for less than one year. The returns reflect changes in unit value and assume that all income/realized net gains are retained by the segregated fund in the periods indicated and are reflected in higher unit values of the fund. The returns do not take into account sales, redemption, distribution or other optional charges or income taxes payable that would have reduced returns or performance. Past performance of any fund is not necessarily indicative of its future performance.

ANY AMOUNT THAT IS ALLOCATED TO A SEGREGATED FUND IS INVESTED AT THE RISK OF THE CONTRACT HOLDERS AND MAY INCREASE OR DECREASE IN VALUE.

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