Q2 2026 Fund Commentary

Commentary and opinions are provided by JPMorgan Asset Management (Canada) Inc..

Market commentary

The U.S. equity market advanced strongly during the quarter as investor sentiment improved amid de-escalating tensions in the Middle East and renewed conviction in the AI investment cycle. A sharp decline in oil prices helped ease inflation concerns and supported a more favourable backdrop for risk assets. Strong corporate earnings and a generally constructive guidance environment further underpinned market performance, while rising capital expenditure plans among major technology companies reinforced confidence in the durability of AI-driven growth.

Although market leadership remained concentrated, gains broadened within the technology ecosystem as semiconductor and AI infrastructure companies benefited from increasing investment tied to digital infrastructure and data center expansion. Within the broader market, the Information Technology and Industrials sectors led performance, while Energy and Utilities lagged. Large-cap stocks underperformed small-caps over the quarter, and growth outperformed value.

Performance

Stock selection in the industrial cyclical and basic materials industries contributed to the Fund’s performance.

Lam Research Corp., a leading provider of wafer fabrication equipment and services to the semiconductor industry, contributed to performance. In the sub-advisor's view, the stock benefited from record revenue growth, exceptional gross margin expansion and raised 2026 guidance signalling strong execution. The sub-advisor believes Lam Research Corp. is well placed to outgrow industrywide wafer fabrication equipment spending because of its strong position in memory, where capacity-add expectations continue to trend higher amid a historic supply shortage, alongside a strengthening position in foundry and logic. Seagate Technology Holdings PLC, a leading provider of data storage solutions for cloud and enterprise customers, also contributed to performance because of exceptional data center revenue growth, strong margin expansion and raised long-term guidance reflecting structural industry tailwinds.

Stock selection in the hardware and semiconductors and Utilities sectors detracted from the Fund’s performance.

Intel Corp., a leading semiconductor manufacturer focused on computing, data center and foundry technologies, detracted from performance. An underweight position weighed on relative returns as the stock outperformed on accelerating server CPU demand and improved pricing power, and preliminary foundry engagements with Apple Inc. and Tesla, Inc. provided optimism that Intel Corp.'s manufacturing turnaround is taking shape. SanDisk Corp., a provider of NAND flash memory and storage solutions serving consumer, enterprise and cloud markets, also detracted from performance. An underweight position weighed on relative returns because of strong pricing-driven revenue growth that bolstered margins and earnings power, alongside strategic multi-year customer partnerships that, in the sub-advisor's view, could help suppress the historical cyclicality endemic to the industry.

Portfolio activity

There were no significant changes to the Fund’s portfolio during the quarter.

Outlook

The sub-advisor continues to focus on the fundamentals of the economy and company earnings. In the sub-advisor's view, the U.S. equity market backdrop remains constructive amid evolving macroeconomic and geopolitical conditions, with continued strength in corporate earnings and sustained AI-related investment supporting the outlook for equities. However, narrow market leadership and heightened return dispersion reinforce the case for active stock selection. The sub-advisor remains focused on high-conviction stocks and seeks to take advantage of market dislocations for compelling stock selection opportunities.