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Quarterly Aviator Portfolios® update

What happened in financial markets during Q2 2025?

Stock and bond markets*

INDEX CLOSE Q2 YTD
S&P/TSX Composite 26,857.12 7.78% 8.61%
Dow Jones Industrial Average 44,094.77 4.98% 3.64%
S&P 500 Index 6,204.95 10.57% 5.50%
NASDAQ Composite 20,369.73 17.75% 5.48%
10-year Canadian Bond Yield 3.31% 0.34% 0.08%
10-year U.S. Treasury Yield 4.24% 0.01% -0.34%
WTI Crude Oil (US$/barrel) US$65.11 -8.91% -9.22%
Canadian Dollar $0.7349 5.74% 5.71%
Bank of Canada Prime Rate 4.95%

*Performance ending June 30, 2025. Sources: Bloomberg.

Read Investment Update weekly for the latest information on the financial markets, insights around current headlines, special reports, and more.

How Aviator Portfolios® performed during Q2 2025

The Aviator Portfolios® had a steady quarter on an absolute return basis but none of the three portfolios were able to achieve any relative outperformance. Growth outpaced income in the second quarter: The Co-operators Aviator Growth Portfolio returned 3.21%, the Co-operators Aviator Diversified Portfolio returned 2.76% and the Co-operators Aviator Income Plus Portfolio returned 1.50%. The relative underperformance was concentrated primarily in the global equity and Canadian equity allocations.

Note: Rates of return for each portfolio are provided below 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.

The Co-operators Commercial Mortgage Fund was one of the best performing underlying funds within the Co-operators Aviator® Income Plus Portfolio. The fund represents the third largest weighting in the portfolio and contributed 6 basis points (bps) of active return. Commercial mortgage exposure is a unique asset class that provides income to the portfolio through diligent credit underwriting.

The Co-operators Templeton Global Bond Fund contributed the largest active return to the portfolio at 18 bps. Currency exposure from Ghana, South Korea, Malaysia, Australia, Mexico, and Brazil contributed to active return. Duration exposure to Brazil, South Africa, and Ghana were all drivers of relative return above the benchmark, as monetary policy around the world was in an easing phase and most developed markets saw lower yields over the second quarter.

aviator-income-plus-portfolio-investment-segmentation-pie-chart
Investment Segmentation
  • Canadian Fixed Income 61.07%
  • Canadian Equity 16.70%
  • Foreign Fixed Income 10.18%
  • U.S. Equity 5.16%
  • Cash & Other Net Assets 4.61%
  • International Equity 2.28%
Rates of Return
Series 100
Guarantee Level Q2 1 year 3 year 5 year Since inception
Dec. 2, 2019
75-75 1.08% 8.16% 5.92% 2.90% 2.71%
75-100 1.04% 7.98% 5.75% 2.73% 2.53%
Rates of Return
Series 500
Guarantee Level Q2 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 1.14% 8.40% 6.16% 3.12% 2.81%
75-100 1.09% 8.22% 5.98% 2.95% 2.64%
Top 10 holdings
Co-operators Corporate Bond Fund 24.97%
Co-operators Canadian Fixed Income Fund 20.01%
Co-operators Commercial Mortgage Fund 14.95%
Co-operators Preferred Share Equity Fund 10.01%
Co-operators Global Equity Fund 7.59%
Co-operators ClearBridge Canadian Equity Fund 5.00%
Co-operators Templeton Global Bond Fund 4.99%
Co-operators Brandywine U.S. High Yield Fund 4.99%
Co-operators Franklin Canadian Short Term Bond Fund 4.99%
Co-operators Concentrated Canadian Equity Fund 2.50%
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.

The Co-operators Concentrated Canadian Equity Fund achieved strong returns on an absolute basis. The fund added 0.82% to the portfolio’s overall return but was the second largest detractor from active return, underperforming its benchmark by 24 bps. The fund makes up 12.5% of the portfolio which is tied for the second largest weighting. The fund currently holds an underweight position in financials, and an overweight position in information technology, relative to the fund’s benchmark.

Despite its 5% weighting in the overall portfolio, the Co-operators Templeton Global Bond Fund added 18 bps of relative outperformance. Active return from the fund was achieved with a combination of interest-rate strategies, currency trading, and sovereign credit exposure, as monetary policy around the world was in an easing phase and most developed markets saw lower yields over the second quarter.

aviator-diversified-portfolio-investment-segmentation-Pie-Chart
Investment Segmentation
  • Canadian Equity 29.09%
  • Canadian Fixed Income 28.48%
  • U.S. Equity 18.99%
  • Foreign Fixed Income 11.11%
  • International Equity 7.86%
  • Cash & Other Net Assets 4.47%
Rates of Return
Series 100
Guarantee Level Q2 1 year 3 year 5 year Since inception
Dec. 2, 2019
75-75 2.30% 10.87% 8.22% 6.26% 4.85%
75-100 2.26% 10.69% 8.04% 6.08% 4.66%
Rates of Return
Series 500
Guarantee Level Q2 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 2.36% 11.11% 8.45% 6.49% 4.40%
75-100 2.32% 10.93% 8.27% 6.31% 4.23%
Top 10 holdings
Co-operators Canadian Fixed Income Fund 17.49%
Co-operators Global Equity Fund 12.64%
Co-operators Concentrated Canadian Equity Fund 12.48%
Co-operators Commercial Mortgage Fund 12.45%
Co-operators Preferred Share Equity Fund 10.00%
Co-operators ClearBridge Canadian Equity Fund 7.50%
Co-operators Small-Cap U.S. Equity Index Fund 7.48%
Co-operators Brandywine U.S. High Yield Fund 7.48%
Co-operators Fidelity Global Real Estate Fund 5.01%
Co-operators Templeton Global Bond Fund 4.99%
The top 10 investments make up 97.52% 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 Co-operators Global Equity Fund is the heaviest weighing underlying fund in the portfolio at 17.5%. A 2.94% return below the benchmark detracted 51 bps of active return from the portfolio. This fund posted a positive 2.74% return for the quarter which added 0.48% to the absolute return of the portfolio. The allocations for this fund remain slightly defensive as it is underweight on some of the tech names that make up a large part of the benchmark index.

The Co-operators Templeton Emerging Markets Fund added 8 bps of active return to the portfolio after a 2.27% active return for the underlying fund. The fund carries a small weight within the portfolio but provided strong returns in Q2. The outperformance can be attributed to strong security selection from within the financials and consumer discretionary sectors in addition to an overweight position in the information technology sector.

aviator-growth-portfolio-investment-segmentation-pie-chart
Investment Segmentation
  • Canadian Equity 29.90%
  • U.S. Equity 27.85%
  • Foreign Fixed Income 13.14%
  • Canadian Fixed Income 12.88%
  • International Equity 12.09%
  • Cash & Other Net Assets 4.14%
Rates of Return
Series 100
Guarantee Level Q2 1 year 3 year 5 year Since inception
Dec. 2, 2019
75-75 2.69% 11.65% 9.18% 7.57% 5.52%
75-100 2.65% 11.47% 9.01% 7.39% 5.31%
Rates of Return
Series 500
Guarantee Level Q2 1 year 3 year 5 year Since inception
Oct. 2, 2017
75-75 2.75% 11.89% 9.42% 7.80% 4.82%
75-100 2.71% 11.71% 9.24% 7.62% 4.65%
Top 10 holdings
Co-operators Global Equity Fund 17.68%
Co-operators Concentrated Canadian Equity Fund 12.97%
Co-operators Fidelity Global Real Estate Fund 10.01%
Co-operators ClearBridge Canadian Equity Fund 10.00%
Co-operators Small-Cap U.S. Equity Index Fund 9.97%
Co-operators Brandywine U.S. High Yield Fund 9.97%
Co-operators Commercial Mortgage Fund 8.46%
Co-operators Preferred Share Equity Fund 7.49%
Co-operators Templeton Global Bond Fund 4.99%
Co-operators Corporate Bond Fund 4.99%
The top 10 investments make up 96.53% of the fund.
Total number of investments: 11

Key take-aways

After the extreme volatility in April eased off, equity markets showed resilience through Q2 despite ongoing tariff concerns. The S&P 500 and the Nasdaq were back at record-high closing levels by the final two trading days of Q2. The Dow remained slightly below its last record close, but the blue-chip index turned positive year-to-date in the final week of the quarter. Canada’s benchmark TSX, which outpaced its U.S. peers for most of Q2, cooled slightly in late June but had reached an all-time high as recently as June 12.

U.S. Treasuries were volatile in Q2, exhibited by the increase in yields on the long end of the curve. Canadian government bond returns were down slightly, while Canadian corporate bonds and provincial bonds moved modestly higher.

Headline inflation in Canada increased to 1.9% in June (from May’s 1.7% pace), led by gasoline prices that fell less in June than they did in May (-13.4% vs -15.5% on a year-over-year basis). The Bank of Canada held the policy interest rate steady at both meetings in Q2, with policy makers expressing unease about tariff negotiations with the U.S., and despite some stronger than expected economic data.

Over the long term, the market goes up. It’s easy to lose confidence when markets stumble. But periods of uncertainty have happened before, and history consistently shows us that they will recover. Having an investment plan that’s geared toward your individual goals and objectives – and sticking to it – is the best defence against inevitable market downturns. If you have questions, a  Co-operators financial representative is always ready to help.

Interested in more tips and insights? Check out our Market View page for investment basics and weekly updates on market performance. You can even sign up to have this news sent directly to your inbox.

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.

© 2025 Co-operators Life Insurance Company.

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Segregated funds and annuities are administered by Co-operators Life Insurance Company. Not all products are available in all provinces. This material is provided for informational purposes only. Please refer to your policy for applicable coverage details, limitations, and exclusions. The information contained in this communication was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This communication is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any investment. The information contained in this communication was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This communication is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any investment Co-operators® is a registered trademark of The Co-operators Group Limited and is used with permission. Aviator Portfolios® is a registered trademark of The Co-operators Group Limited. Aviator Portfolios® is an investment product which may include features or options such as segregated funds, portfolios of segregated funds or guaranteed rates. Guaranteed benefits are payable on death or maturity (reduced proportionately by withdrawals from, or investment transfers out of, the segregated funds). No guarantee is provided on 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 advisor for details. Addenda Capital® is a registered trademark of Addenda Capital Inc. and is used with permission. Franklin, Templeton, ClearBridge and Franklin Templeton® are registered trademarks of Franklin Templeton Investments Corp. and are used with permission. ClearBridge Investments and Brandywine Global are Franklin Templeton affiliated companies.

Returns, investment segmentation and top holdings as of June 30, 2025. 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.

If you have questions or want to discuss your investments, please contact your authorized financial representative. In Quebec, a licensed insurance advisor is a Financial Security Advisor or a Representative.

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The S&P/TSX Composite is a product of TSX Inc., its affiliates and/or their licensors and has been licensed for use by Co-operators Financial Services Limited. Neither TSX Inc., their affiliates, nor their third-party licensors make any representation or warranty, express or implied, as to the accuracy of market representation of any index, or the context from which they are drawn, and shall not be liable for any errors, omissions or interruptions of any index or the data included therein.