Welcome to Our Monthly Newsletter - Pharus Perspectives!

Welcome to the July edition of Pharus Perspectives, where we provide timely market insights and practical strategies. As markets pivot, currencies fluctuate, and new investment frontiers emerge, we’re here to arm you with the insights and strategies you need to seize every opportunity.

What You’ll Discover Inside

Market Trends – A dynamic mid-year review: recap where markets have surged or stalled, and chart the course for the second half.

Tax Planning Strategies – Proven tactics to optimize your private corporation’s tax position and keep more capital working for you.

Resilient Portfolios – Build a rock-solid investment mix that weathers volatility and captures tomorrow’s winners.

Mid-Year Market Review: 2025 

Shaken, Not Stirred

As we reach the midpoint of 2025, global markets have demonstrated resilience, recovering from early-year volatility. For long-term savers and retirement-focused investors, this year has highlighted key trends shaping the investment landscape and potential opportunities for the future. Below is a summary of the major developments, emerging trends, and areas to watch in the months ahead. 

Key Market Trends

1. Volatility and Recovery

What Happened: In April, U.S. tariffs triggered a sharp sell-off, but markets rebounded strongly after a pause in trade tensions. 

What Unfolded:

  - Global equities hit all-time highs by mid-June. 

  - Credit spreads tightened, signaling improved confidence in corporate debt markets. 

  - Volatility subsided, though policy unpredictability remains a factor. 

Potential Opportunity:

Periods of volatility often create opportunities for disciplined, long-term investors to benefit from market recoveries. 

2. Resilient Fundamentals

Despite geopolitical and policy uncertainties, the global economy has shown resilience: 

Corporate and Household Strength: Healthy balance sheets are supporting spending and investment.

Equity Wealth Effect: Rising stock prices are boosting consumer confidence and spending, particularly among high-income households. 

Key Takeaway: Resilient fundamentals can provide a supportive backdrop for long-term growth, even amid short-term disruptions. 

Outlook for the Second Half of 2025

Growth Expectations

Global Growth: Slower but positive growth is expected, with a "soft landing" scenario likely. 

Regional Variations: 

  - The U.S. economy remains steady, driven by corporate earnings and consumer spending. 

  - Europe is benefiting from fiscal stimulus and lower energy costs. 

  - China is stabilizing, with policymakers targeting ~5% growth through fiscal measures. 

Emerging Trends

Trade Policy Easing: The pause in tariffs has reduced economic headwinds, though trade negotiations remain a wildcard. 

Geopolitical Risks: Tensions and oil price volatility could disrupt markets, requiring close monitoring. 

Recession Risk: While not the base case, elevated uncertainty means a downturn cannot be ruled out. 

Regional Highlights

United States

Trends: Slower but steady growth, supported by corporate earnings and consumer spending. 

Potential Opportunities: Innovation in areas like AI and technology continues to drive long-term growth potential. 

Canada

Trends: The economy faces headwinds, with unemployment rising to 7% and inflation reaccelerating. 

Market Performance: Canadian equities have outperformed U.S. stocks year-to-date, highlighting the value of diversification. 

Potential Opportunities: Government bonds remain a key defensive asset, while equity valuations are near long-term averages. 

Europe

Trends: Fiscal stimulus, lower energy costs, and ECB easing are supporting growth. 

Potential Opportunities: European equities may offer value, particularly in sectors benefiting from fiscal spending and structural reforms. 

China

Trends: Easing trade tensions and targeted fiscal support are stabilizing the economy. 

Potential Opportunities: Chinese equities remain attractively valued, with improving corporate returns. 

Other Regions

Japan: Gradual economic improvement, supported by strong corporate earnings. 

Australia/New Zealand: Bonds offer value, while equity markets appear fully priced. 

Key Themes for Long-Term Investors

1. Diversification Matters More Than Ever

Global Trends: U.S. markets have led for years, but other regions, such as Europe and Asia, are showing signs of catching up. 

Currency Considerations: The U.S. dollar appears historically expensive, which could make international investments more attractive over the medium term. 

2. Balancing Growth and Stability

Equities: Growth sectors like technology and healthcare continue to drive innovation, while value sectors like financials and energy may benefit from economic recovery. 

Fixed Income: High-quality bonds remain a key source of stability, particularly for those seeking income or protection against volatility. 

3. Policy and Geopolitics as Wildcards

Trade Policy: While tensions have eased, uncertainty around future negotiations could impact global trade and markets. 

Geopolitical Risks: Oil price volatility and geopolitical tensions remain potential disruptors. 

Canada-Specific Trends

Economic Overview

Growth Challenges: Canada’s economy faces headwinds, with rising unemployment and inflation creating a challenging environment. 

Market Performance: The S&P/TSX Composite is up 7.4% YTD, outperforming U.S. markets (~2.5% YTD). 

Emerging Trends

Recession Risk: A technical recession is possible, with GDP contractions expected in Q2 and Q3. 

Household Debt: Elevated debt levels could strain consumer spending if economic conditions worsen. 

Potential Opportunities: Canadian government bonds remain a defensive asset, while equity valuations are relatively undemanding. 

Our Thoughts in a Changing Landscape

Global Diversification

Why It Matters: U.S. markets have been a dominant force, but international markets are showing signs of strength. Diversifying globally can help capture opportunities in undervalued regions. 

Sector Trends

Growth Sectors: Technology and healthcare continue to lead innovation, offering long-term growth potential. 

Value Sectors: Financials, energy, and industrials may benefit from economic recovery and mean-reversion trends. 

Fixed Income Stability

High-Quality Bonds: Short-to-intermediate duration bonds provide income and stability, particularly in uncertain environments. 

Government Bonds: Canadian and U.S. government debt remain key defensive holdings. 

Closing Thoughts 

The first half of 2025 has been a reminder of the importance of staying disciplined and focused on long-term goals. While markets have recovered from early-year volatility, uncertainties remain, including geopolitical risks, trade policy, and inflation dynamics. 

For long-term investors, the key themes to watch include: 

1. Global Diversification: Expanding beyond U.S. markets to capture opportunities in undervalued regions. 

2. Balancing Growth and Stability: Maintaining exposure to both growth-oriented equities and defensive fixed income. 

3. Staying the Course: Avoiding overreaction to short-term volatility and focusing on long-term fundamentals. 

By staying informed and disciplined, investors can navigate the evolving landscape and position themselves for long-term success. 

Source: Click Here for Full Details.

Monthly World Markets Report

 

Welcome to this month’s World Markets Report. In our latest issue, we explore the monumental wealth transfer reshaping global asset flows and assess the geopolitical risks putting pressure on oil markets. This month’s report distills the latest forces reshaping oil markets: escalating geopolitical tensions, evolving demand and supply dynamics, and strategic takeaways for investors. Dive in for in-depth analysis and actionable insights.

 

Geopolitical Risks in Oil Markets

June saw air and missile exchanges between Israel and Iran, and U.S. strikes on Iranian sites, driving oil‐price volatility.

Fears of supply disruptions via the Strait of Hormuz—through which 20% of global oil ships—pushed prices up from four‐year lows.

In extreme escalation scenarios, crude could test US$100/barrel; a de-escalation would erase the geopolitical premium.

Central banks are wary: sustained price spikes risk triggering stagflation pressures.

Oil Demand Trends

• Near‐term demand growth remains subdued amid trade tensions and slowing GDP in key regions.
• The IEA projects global demand rising by 720,000 bpd in 2025—modest versus historical gains.
• Emerging Asia leads growth, while advanced economies lean on energy efficiency and rapid EV adoption.
• EVs are set to claim 30–40% of new‐car sales by 2030, potentially cutting oil use by 5.4 million bpd.

Oil Supply Dynamics

• Global supply is poised to increase by 1.8 million bpd in 2025, outpacing demand growth.
• OPEC+ plans another 411,000 bpd boost in July, prioritizing market share over price support.
• Non-OPEC producers (Brazil, Guyana, Canada) and U.S. shale additions widen the supply surplus.
• U.S. shale may have peaked as rig counts and capex fall, offering potential support for prices.

Key Takeaways for Investors

• Short-term volatility driven by geopolitical risk can create trading opportunities—but expect a downward bias long term.
• Energy stocks remain integral to the S&P/TSX Composite; focus on dividend-paying pipelines and infrastructure for stable cash flows.
• Diversification within the energy sector is critical: balance exploration & production exposure with lower‐volatility assets.
• Monitor central bank reactions to oil spikes and stay attuned to global growth indicators for demand signals.

Stay informed on oil market shifts and refine your energy allocation to navigate volatility and capitalize on emerging trends.

 

The Great Wealth Transfer

The Great Wealth Transfer describes the unprecedented shift of wealth from Canadian baby boomers to younger generations—an estimated $1 trillion moving to Gen X and Millennials in the coming years.

Key Trends:

• Aging baby boomers are passing assets to spouses, children, and grandchildren both during life and at death.
• Early transfers help reduce estate taxes and let seniors see the impact on beneficiaries.
• 31% of first-time homebuyers in 2024 received family assistance for down payments (up from 20% in 2015).
• Average monetary gifts climbed to $115,000 in 2024 from $66,000 in 2019.

Generational Snapshot

Generation	Birth Years	Age Range	% Saving for Retirement
Generation Z	1997–2010	14–27	70%
Millennials	1981–1996	28–43	82%
Generation X	1965–1980	44–59	84%
Baby Boomers	1946–1964	60–78	55%

How to Prepare

• Engage a financial advisor to tailor estate planning, tax strategies, and portfolio management.
• Draft or update wills, establish trusts, and set healthcare directives and life insurance.
• Educate heirs on inheritance tax rules—only one-third currently feel well-informed.
• Recognize that women will control nearly $4 trillion in Canadian assets by 2028.
• Encourage beneficiaries to develop sound financial habits and clarify risk tolerance now.
• Account for rising healthcare costs and longer retirements—35% of Canadians over 55 worry they’ll need these assets later.

Bottom Line

Regularly review and update estate plans, involve family members in planning discussions, and build strong relationships with your advisors to ensure a smooth, tax-efficient transfer of wealth.

Monthly Performance Update

 

Market Performance- June 30th 2025
Index	1 Month	3 Months	YTD	1-Year	3-Year	5-Year
S&P TSX	2.9%	8.5%	10.2%	26.4%	16.1%	15.0%
S&P 500	5.1%	10.9%	6.2%	15.2	19.7%	16.6%
NASDAQ	6.6%	17.7%	5.5%	14.9%	22.7	15.2
MSCI EAFE	2.2%	12.1%	19.9%	18.3%	16.6%	11.7%
MSCI Emerg. Mkts	6.1%	12.2%	15.6%	16.0%	10.2%	7.30%
MSCI World	4.2%%	11.0%	8.6%	14.7%	16.5%	12.8%
FTSE Canada Bond Univ.	0.1%	-0.6%	1.4%	6.1%	4.3%	-0.4%

 

Source: Click Here for Full Details.

Observed Trends from Our Research Models

Our research models have highlighted several potential trends in asset allocation strategies based on current market dynamics. These observations reflect evolving patterns and considerations that may shape investment approaches. Please note, these insights are not recommendations or advice but rather a summary of emerging themes.

Fixed Income Trends

• Stable Income Focus: There appears to be a growing interest in strategies that prioritize stable income streams through fixed-income instruments.
• Quality and Duration Balance: A tilt toward high-quality, short-to-intermediate duration bonds is being observed, potentially reflecting efforts to manage duration risk.
• Adaptability: Flexibility in adjusting duration remains a key consideration as interest rate expectations continue to evolve.

US Equity Trends

• Liquidity Considerations: Increased attention is being given to USD-denominated ETFs, which may offer enhanced liquidity and tighter bid-ask spreads.
• Shifts in Weighting: Some trends suggest a relative shift in equity exposure, with the US equity segment appearing to play a more prominent role.
• Currency Volatility Management: Strategies to address currency volatility, such as the use of CAD-hedged instruments, are gaining traction.

Canadian Equity Trends

• Benchmark Alignment: Observations suggest a modest underweight stance in Canadian equities relative to benchmarks, reflecting broader equity allocation trends.
• Diversification Within Canada: There is a focus on maintaining exposure across a range of sectors to avoid over-concentration in specific industries.
• Rebalancing Opportunities: Periodic rebalancing is being used to capture relative value opportunities within the Canadian market.

International Equity Trends

• Diversified Exposure: A strong emphasis on diversified international sectors is evident, with less focus on narrow regional positions.
• Relative Value Focus: Trends suggest a preference for capturing relative value opportunities across international markets without taking large directional bets.
• Global Sector Trends: Observations indicate a focus on global sectors that may offer resilience in varying economic conditions.

Sector Positioning Trends

• Barbell Strategies: A barbell approach, balancing exposure between Value and Growth segments, is emerging as a potential trend.
• Value Sector Focus: There is a noticeable tilt toward value-oriented sectors, potentially reflecting expectations of mean-reversion opportunities.
• Growth as a Complement: Growth-oriented investments are being used as a complement, possibly to provide resilience in slower cyclical environments.

These observed trends reflect the dynamic nature of market conditions and the diverse strategies being explored to navigate them. As always, individual circumstances and objectives should guide any investment decisions.

 

Financial Planning Feature

Tax Planning Alert: The Death of a CCPC Shareholder

In a recent article, Jamie Golombek outlines the complex tax implications that arise when a shareholder of a Canadian-Controlled Private Corporation (CCPC) passes away. His expert analysis highlights how strategic post-mortem planning can mitigate double taxation and preserve wealth for heirs.

Key Tax Implications & Strategies

Deemed Disposition on Death The deceased shareholder is considered to have sold all capital property, including CCPC shares, at fair market value—triggering potential capital gains tax.

Risk of Double Taxation Two layers of tax may apply:

1. Capital gains tax on death
2. Dividend tax when the estate extracts funds from the corporation

Lifetime Capital Gains Exemption (LCGE) Up to $1.25 million may be tax-free if the shares meet Qualified Small Business Corporation (QSBC) criteria.
 

Post-Mortem Planning Options To reduce tax exposure, Golombek outlines two strategies:
 

1. Loss Carryback: Using estate capital losses from share redemption to offset gains at death
 

2. Pipeline Planning: Reorganizing share ownership to convert dividends into capital gains—taxed more favorably
 

Role of Life Insurance Corporate-owned life insurance can provide liquidity for taxes and affect the valuation of shares at death.
 

Real-Life Example Golombek illustrates how poor planning could result in over $6.6M in taxes on a $10M gain—emphasizing the urgency of professional estate planning.
 

Source: Click Here for Full Details.

CIBC Smart Advice Feature

Smart Advice Spotlight – July 2025: Building a Resilient Portfolio

In a volatile market, a well-diversified, long-term portfolio may be your best asset.
 

In today’s unpredictable market climate, Canadian investors are facing volatility driven by tariff tensions, inflation, and shifting interest rates. But according to David Wong, Chief Investment Officer at CIBC Asset Management, resilience—not reaction—is key.
 

Here’s how to strengthen your portfolio for the next 5 years:
 

1.Diversify Intelligently: Spread investments across geographies, sectors, asset classes, and styles—including both traditional and alternative assets.
 

2.Lean Into Equities: Despite market stress, long-term equity growth still aligns with earnings growth—historically averaging ~7% annually for the S&P 500.
 

3.Don't Dismiss Bonds: Higher yields (now >3% for Canadian 10-year) offer solid long-term return potential—especially when held consistently.
 

4.Explore Alternatives: Hedge funds, private real estate, and infrastructure now accessible via mutual funds—adding depth to diversification.
 

5.Gold: Proceed with Caution: While strong amid inflation, gold is volatile and lacks cash flow.
 

6.Be Selective with U.S. Exposure: Policy uncertainty looms, but innovation—especially in AI—could drive future growth.
 

7.Stay Focused on Fundamentals: Avoid speculative swings. Study market foundations and stick to a disciplined, purpose-driven investment strategy.
 

Source: Click Here for Full Details.

Financial Solution Feature

In this section, we educate the reader on different financial solutions. We discuss and elaborate each idea over a couple monthly editions. This section is not to be taken as specific advice.

Investor Feature: Navigating Volatility with “Twin-Win” Structured Notes

In today’s unpredictable markets, investors are constantly seeking tools that provide downside protection while maintaining the potential for upside growth. Traditional equities can experience significant swings, and bonds may struggle to keep pace with inflation. Structured notes have emerged as a versatile solution, offering tailored risk-return profiles to meet individual investment needs.

The Challenge: Balancing Protection and Participation

Markets rarely move in a straight line. A sudden downturn can wipe out years of gains, while staying on the sidelines risks missing out on market recoveries. The ideal solution? A strategy that:

• Provides meaningful participation in market rallies
• Offers a safety net against mild to moderate downturns
• Preserves capital in most loss scenarios

Introducing the “Twin-Win” Structured Note

The “Twin-Win” Structured Note addresses the challenges brought in by volatile markets with high uncertainty. This innovative product is designed to deliver:

• Enhanced upside participation when the chosen Reference Asset performs positively
• A guaranteed positive return if the Reference Asset finishes above a predetermined threshold
• Protection against declines up to a specified buffer level at maturity

Whether your Reference Asset is an index, ETF, or a basket of securities, the Absolute Return Structured Note is tailored to align with your market outlook and risk tolerance.

How It Works

 

Below is an example just for illustrative purposes only:

1. Choose Your Reference Asset

• Select a benchmark such as the S&P/TSX Composite Index or another market indicator.

2. Define Key Parameters

• Participation Rate: Fixed at 100%, meaning you fully participate in the Reference Asset’s performance.

3. Performance Thresholds:

• Above 100%: Full participation in the underlying appreciation.
• Between 70% and 100%: Absolute value of the underlying return is applied.
• Below 70%: Returns reflect the actual performance of the Reference Asset.

4. Determine Payoff at Maturity

• Your returns are calculated based on the Reference Asset’s performance:

• If the underlying performance is above 100%:

• You receive your principal plus 100% of the underlying appreciation.

• If the underlying performance is between 70% and 100%:

• You receive your principal plus the absolute value of the underlying return.

• If the underlying performance is below 70%:

• You receive your principal adjusted by the actual performance of the Reference Asset.

 

This straightforward structure ensures that investors benefit from full participation in strong market rallies, gain protection in moderate downturns, and have clarity on their returns in all scenarios. 

This structured approach provides investors the potential benefit from strong market performance, gain protection in moderate downturns (even in cases of significant declines like −15%), and have clarity on their returns in all scenarios.

Key Takeaways for Investors

• Tailored Protection: Buffers shield against typical market fluctuations, though extreme declines still pose risks.
• Enhanced Upside: Participation rates exceeding 100% amplify gains during market rallies.
• Defined Payoff: Know your potential returns in advance—no surprises at maturity.
• Portfolio Integration: Use Absolute Return Notes alongside equities and fixed income to reduce overall portfolio volatility.

By incorporating “Twin-Win” Structured Notes for a portion of your portfolio, you can better align your investment strategy with your market outlook and risk tolerance. For suitable investors, this product offers a balanced approach to capital preservation and growth potential, helping you navigate today’s volatile markets with confidence.

 

Fun Idea

Dive into Toronto’s Summer Playground: Networking Reimagined

This season, let’s step beyond boardrooms and into the city’s sun-soaked streets. We’ve curated seven unforgettable Toronto experiences that blend adventure, creativity and professional growth under the summer sky.

Each activity—from scaling the CN Tower’s EdgeWalk to swapping stories around Trillium Park’s fire pits—is designed to spark fresh connections, fuel inspiration and turn casual outings into lasting business wins. Flip the page below to discover insider tips on making every moment count.

1. EdgeWalk at CN Tower

Step onto the world’s highest external building ledge (116 storeys up!) with a full-safety harness and take in 360° skyline views. Sunset sessions add golden light for epic Insta shots and perfect small-group bonding.

2. Paddleboarding at Humber Bay Shores

Rent a board, grab a guide or join a sunrise group lesson along the sheltered bay. It’s serene, beginner-friendly and offers jaw-dropping vistas of Toronto’s glassy towers against Lake Ontario.

3. Porch View Dances

Join Kaeja d’Dance’s free, roaming performance that transforms neighbourhood porches into mini-stages. Each pop-up “site” sparks conversation about creative placemaking—and gives readers a fresh lens on community engagement.

4. Trillium Park Fire Pits

Reserve a lakeside fire pit at Ontario Place’s Trillium Park. Cozy up around the flames with s’mores, mocktails in thermoses and a view of sailboats drifting past. It’s a surprising “cabin-in-the-city” experience.

5. Toronto Outdoor Picture Show

Catch flicks under the stars at Christie Pits, Fort York or Corktown Common. This free film fest features everything from cult classics to Canadian shorts—plus live trivia and food-truck pop-ups pre-screening.

6. Sun/Shade at The Bentway

Explore a massive sand-dune dance performance, immersive light-and-shadow art, roller-skate parties and budget-friendly workshops—all beneath the Gardiner. It’s a true multi-sensory playground.

7. Yorkville Murals Festival

Stroll Bellair to Hazelton for live mural painting, interactive installations and block-party vibes. Pair it with a café crawl on Cumberland St. and you’ve built an afternoon of networking, creative inspiration and caffeinated pit stops.

 

To stay up to date on market events, news and reports, follow Pharus Wealth Advisory Group on our Social Media Pages. For Financial Literacy and Planning, visit Pharus Resources, where we upload timely articles on Financial Planning and Financial Literacy Resources.

 

 

Pharus Wealth Advisory Group

The Beacon to your Financial Journey

 

1623 Avenue Road, Toronto ON M5M 3X8

Phone: 416-861-2460

Email: mailbox.pharuswealth@cibc.com

Website: www.pharuswealth.ca