Market Overview - Canadian equities advanced in Q3, with the S&P/TSX Composite Total Return Index increasing by 12.5%, reaching an all-time high [2] - Seven of the eleven GICS sectors set new records, including energy, materials, industrials, consumer discretionary, consumer staples, financials, and utilities [2] - The U.S. dollar rose 2.3% against the Canadian dollar to $1.39 USD/CAD, although it remains down 3.2% year-to-date [3] Economic Context - Canada's economy showed modest improvement in July, with GDP growth affected by high unemployment and low inflation [4] - The Bank of Canada and the Federal Reserve both cut rates, with the Bank of Canada lowering rates to 2.50% to stimulate housing and consumption [4] Sector Performance - On an absolute return basis, 10 of 11 GICS sectors increased in Q3, with materials (+37.8%), IT (+13.2%), and energy (+12.6%) being the best performers [5] - Weakness in industrials was noted, particularly in Canadian railways, which faced pressure from softer shipping volumes and trade uncertainty [9] - Energy sector performance was mixed, with volatility in crude oil and natural gas prices, ending at $62.37/bbl and $3.30/mmbtu respectively [6] Strategy Performance - The ClearBridge Canadian Equity Strategy underperformed the benchmark in Q3, primarily due to cyclical exposure in materials [8] - Financials were the best contributors to the Strategy's performance, with strong selection benefiting from not owning underperforming stocks [12] Portfolio Positioning - The Strategy's largest sector exposures were in financials, industrials, and energy, with an underweight in materials and financials [18] - Trading activity increased, with selective exposure to out-of-favor cyclical stocks and trimming of defensive sectors [14] Corporate Actions - Several corporate actions occurred, including Parkland Corp.'s acquisition by Sunoco LP and MEG Energy's unsolicited bid from Strathcona Resources [13] - Teck Resources and Anglo American agreed to a merger, creating a global mining leader with significant copper exposure [13] Outlook - Canadian equity markets continued to show strength, supported by resilient corporate earnings amid global dynamics [19] - Investor sentiment remains cautious but resilient, with macro headwinds and political risks increasingly priced into expectations [19]

Core Insights - The article discusses the author's transition to independent investment research after over 43 years in the industry, emphasizing a focus on actionable investment insights rather than adhering to external agendas [1] - The author highlights a unique approach to equity investing, combining quantitative analysis with fundamental theories to derive meaningful investment stories [1] - The article reflects on the author's extensive experience across various market segments and investment strategies, including managing a high-yield fixed-income fund and developing quantitative asset allocation models [1] Group 1 - The author has specialized in rules/factor-based equity investing strategies, aiming to use numbers to inspire human intelligence-driven investment narratives [1] - The author critiques traditional quantitative investing methods, advocating for a blend of factor analysis and classic fundamental analysis to understand a company's future potential [1] - The article mentions the author's previous roles, including editing stock newsletters and conducting investor education seminars, showcasing a commitment to educating investors [1] Group 2 - The author expresses enthusiasm for the new phase of sharing insights on Seeking Alpha, inviting feedback and engagement from the audience [1] - The article indicates a long-standing passion for investor education, evidenced by the author's authorship of books on stock selection and analysis [1] - The author encourages open dialogue and constructive criticism, indicating a willingness to engage with the investment community [1]