Elbows are up on Canada’s benchmark stock exchange as some of the nation’s most widely held stocks advance through the trade war.

At the halfway point of 2025, the S&P/TSX Composite Index has posted a gain topping nine per cent so far this year compared with an advance of just under six per cent for the U.S. benchmark S&P 500.

The S&P 500, which is in range of a record high, is also the global benchmark. That means Canadian investors with portfolios properly diversified along geographic and sector lines should be seeing similar results.

Canada keeps calm and carries on

Home bias is paying off for Canadian investors thanks to mining stalwarts like Agnico Eagle. The stock is up by 45 per cent since the start of the year on a rally in gold and related metals.

Over the same period, popular commodity related stocks including Canadian Natural Resources, Suncor and Enbridge have chalked up single digit gains.

Most of the big Canadian banks common in many investment portfolios have also gained ground with the Canadian economy under threat from the United States.

• A look at how markets fared in the first half of 2025 and where they go next

Royal Bank of Canada, the nation’s largest bank, has eked out a three per cent advance, while TD Bank has emerged from a money laundering scandal with a 32 per cent gain since the start of the year.

The banks continued to reward shareholders with dividend payouts, as have Canada’s main telecommunications companies and portfolio staples. BCE, Rogers Communications and Telus are posting single-digit gains.

Global growth advances

A return of over five per cent for the S&P 500 in the first half of 2025 is nothing to sniff at considering the United States has taken its trade war to a global level.

It’s important to note the increase comes on the back of a spike in gold prices as markets question the dominance of the U.S. dollar. Gold stocks advanced by 60 per cent in the first half of the year.

In contrast, U.S. auto manufacturing stocks slid by 20 per cent over the same period while the industry tries to figure out what comes next in U.S. President Donald Trump’s trade war.

Overall, Canadians are getting more bang for their loonie when they buy U.S. denominated equities. The Canadian dollar bulked up by more than two cents since the start of the year, topping 73 U.S. cents to the greenback.

Fixed income keeps on giving

Returns would have been tempered for portfolios with heavy weightings in fixed income. Investors nearing, or in retirement, tend to take on a larger portion of fixed income to hedge against risky equity markets.

The cost of that hedge, however, has been relatively low. As an example, one-year guaranteed investment certificates (GICs) yield 3.5 per cent.

Investors who sacrifice gains for safety in fixed income are still being rewarded.

Portfolio check list

If you are looking at your investment statements over the past six months and not seeing a correlation with the benchmarks, there could be a number of reasons.

Big cash and fixed income weightings take their toll on returns, but even equity returns will be stunted if the holdings are too conservative. Diversification also means a good mix of risk levels.

If result don’t reflect returns from the benchmarks your portfolio might not be properly diversified. A qualified investment advisor should be able to help strike a balance between your return expectations and how much risk you are prepared to take on.

Returns that far exceed the benchmarks due to a few hot investments could also mean your portfolio is not properly diversified and gains will be unsustainable over the long run. It presents a great opportunity to trim the winners and add to under-represented positions.

If your portfolio returns fall far below the benchmark, fees could be taking an oversized bite from your investments. Some mutual funds charge more than three per cent of the amount invested annually, which severely dampens returns.

Speak with an advisor or the institution that sold you the funds about lower cost alternatives.