Catalysts and Crosscurrents (TEST)

For the Period Ending February 28, 2025

The TSX Composite Index ended the month down 0.60% as investors grappled with the threat of hefty U.S. tariffs on Canadian goods.

U.S. President Donald Trump initially announced 25% tariffs on Canadian goods with Canada responding in kind with 25% tariffs on U.S. goods, only for President Trump’s plans to be delayed by 30 days. A week after delaying tariffs on Canada and Mexico, President Trump unveiled plans for 25% tariffs on steel. The Trump Tariffs will go ahead on March 4.

In a speech given virtually to a Bank for International Settlements event in Mexico City, Bank of Canada (BoC) Governor Tiff Macklem commented on the prospect of tariffs on the United States’ closest trade partners: “Tariffs mean economies work less efficiently. There will be less investment and lower productivity. That means our countries will produce less and earn less.”

In a published summary of deliberations for its most recent policy meeting, BoC policymakers agreed that the threat of tariffs had increased uncertainty, and this would weigh on business confidence and investment intentions, as well as consumer sentiment. Rate-setting policymakers at the BoC agreed that this also supported the case for a lower policy rate.

Canada’s economy – as measured by Gross Domestic Product – grew by 2.6% in the fourth quarter of 2024. Retail sales rose 2.5% to $69.6 billion in December, the largest monthly increase since 2022 and Canada added 76,000 jobs in January with the employment rate down by 0.1 percentage point to 6.6% while the inflation rate rose slightly to 1.9% in the same month – making it six straight months that the Consumer Price Index was at or below the BoC’s 2% target.

Source: Bloomberg as at February 28, 2025.

*Yield for the 10-year U.S. Treasury

The S&P 500 Index closed February up 1.6%, and the NASDAQ Composite Index closed the month up 1.6%.

MSCI’s EAFE Index was up 3.74% in February, while MSCI’s Emerging Markets Index rose 2.19%. The Russell 2000 Index ended the month down 4.22%, per Bloomberg.

Federal Reserve (Fed) officials agreed in their January meeting that they would need to see inflation decline before lowering interest rates further and expressed concern on the impact of President Trump’s tariff plans on interest rates.

The latest release of Consumer Price Index numbers showed that inflation in January was higher than expected. In a hearing before Congress, Fed Chair Jerome Powell said: “I would say we’re close, but not there on inflation.”

Economic growth in the U.S. slowed in the fourth quarter of 2024, growing just 2.3% on an annualised basis compared with 3.1% in the prior quarter. The U.S. added 143,000 jobs in January as the unemployment rate edged down to 4% and U.S. retail sales fell 0.9% in the same month – larger than expectations of a 0.2% decline.

In Commodities, New York-traded gold futures ended February up 0.86% to US$2,836.80 an ounce. Spot gold, meanwhile, rose 3.93% in February to US$2,846.09 an ounce, per Bloomberg.

West Texas Intermediate (WTI) crude oil fell 3.8% to US$69.76 a barrel in February as worries about the global economic outlook and rising trade tensions from the Trump administration’s tariff plans prompting the U.S. benchmark price to post its biggest monthly losses since September 2024.

The yield on benchmark 10-year U.S. Treasury Bonds fell 33.8 basis points to 4.228% in February.

GLOBAL X’S FEATURED CONTENT

This month we looked at investment opportunities in AI infrastructure, took an overview of Asset Allocation ETFs and at the outlook for uranium in 2025.

Global X has launched the Global X Artificial Intelligence Infrastructure Index ETF (MTRX), which focuses on the energy infrastructure and components critical to AI, including electronic manufacturers and electric utility providers, as well as suppliers of energy commodities such as uranium.

To accompany MTRX, we offer additional strategies such as CHPS and AIGO, which focus on exposure to the companies involved in the development and utilization of AI-related hardware and software.

The U.S. dollar surged in the wake of President Trump imposing sweeping tariffs on America’s trading partners such as Canada, Mexico and China. With tariff developments changing from day to day, now might be the time to consider how currencies might fit into a portfolio.

The Global X 0-3 Month T-Bill ETF (CBIL.U) and the Global X US Dollar Currency ETF (DLR) can be used as a way for U.S. dollar holdings to benefit from the Canadian dollar potentially strengthening against its American counterpart and could be attractive in a period when the Bank of Canada’s overnight rate is higher than the U.S. Federal Reserve’s target rate.

Through a maneuver known as “Norbert’s Gambit” investors could potentially inexpensively convert between the U.S. and Canadian dollar through a discount brokerage.

DLR is the only U.S. dollar currency ETF in Canada that pays interest quarterly, offering a way to earn regular, passive income while holding the U.S. dollar

International stocks appear undervalued relative to U.S. equities and present a compelling value proposition to investors: European stocks are rallying – the Stoxx Europe 600 Index is up nearly 9% for the year to date. A recent Bank of America survey found that U.S. institutional investors expect the Stoxx index to outperform the NASDAQ this year.

To reduce portfolio concentration and diversify away from U.S. large-cap stocks and “Magnificent 7” names, investors might consider stocks from developed markets such as Europe, the Middle East and the Asia-Pacific region, as covered by the MSCI EAFE Index.

Global X offers ETFs based on this index such as EAFX, EACC and EACL. Read our blog on investing in developed markets for more details.

All figures are in Canadian dollars unless otherwise indicated.

The first and second tables highlight the Top 10 Net Subscriptions activity and the Top 10 Performers during the one month ending February 28, 2025. Only ETFs that have reached their first anniversary can be included in the Top Performers table.

If you would like more information about any of these ETFs, please contact your regional client service team or our firm directly at 1-866-641-5739 or email: info@globalx.ca.

Top 10 Net Subscriptions

Subscription data is compiled as at February 28, 2025 and excludes BetaPro ETFs and certain ETF classes.

Top 10 Performers

Performance data is compiled as at February 28, 2025 and excludes BetaPro ETFs and certain ETF classes.

All figures are in Canadian dollars unless otherwise indicated.

Investment fund regulations restrict the presentation of performance figures until a fund reaches its first anniversary.

Source: Global X, February 28, 2025

For the full standard performance of the ETFs, please click the above links or visit www.GlobalX.ca.

DISCLAIMERS

Commissions, management fees, and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their values change frequently and past performance may not be repeated.  Certain Global X Funds may have exposure to leveraged investment techniques that magnify gains and losses which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The Global X Money Market Funds are not covered by the Canada Deposit Insurance Corporation, the Federal Deposit Insurance Corporation, or any other government deposit insurer. There can be no assurances that the money market fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the Funds will be returned to you. Past performance may not be repeated. The prospectus contains important detailed information about the Global X Funds. Please read the relevant prospectus before investing.

The indicated rates of return are the historical annual compounded total returns, including changes in share/unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges, or income taxes payable by any securityholder that would have reduced returns. The rates of return above are not indicative of future returns. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.  Only the returns for periods of one year or greater are annualized returns.

Certain ETFs are alternative investment funds (“Alternative ETFs”) within the meaning of the National Instrument 81-102 Investment Funds (“NI 81-102”) and are permitted to use strategies generally prohibited by conventional mutual funds, such as the ability to invest more than 10% of their net asset value in securities of a single issuer, the ability to borrow cash, to short sell beyond the limits prescribed for conventional mutual funds and to employ leverage of up to 300% of net asset value. While these strategies will only be used in accordance with the investment objectives and strategies of the Alternative ETFs, during certain market conditions they may accelerate the risk that an investment in ETF Shares of such Alternative ETF decreases in value. The Alternative ETFs will comply with all requirements of NI 81-102, as such requirements may be modified by exemptive relief obtained on behalf of the ETF.

 “Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and “TSX®” is a registered trademark of the TSX Inc. (“TSX”). These marks have been licensed for use by Global X Investments Canada Inc. The ETF is not sponsored, endorsed, sold, or promoted by the S&P, TSX, or their affiliated companies and none of these parties make any representation, warranty, or condition regarding the advisability of buying, selling or holding units/shares of the ETF.

Nasdaq®, Nasdaq-100®, and Nasdaq-100® Index are trademarks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Global X Investments Canada Inc. The Fund(s)have not been passed on by the Corporations as to their legality or suitability. The Fund(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND(S) or PRODUCT(S).

The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with Global X Investments Canada Inc. (“Global X”) and any related funds.

The Global X Russell 2000 Index ETF and the Global X Russell 2000 Covered Call ETF (in this disclaimer, the “Russell 2000 Funds”) have been developed solely by Global X Investments Canada Inc. The Russell 2000 Funds are not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell 2000 RIC Capped Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Russell 2000 Funds. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Russell 2000 Funds or the suitability of the Index for the purpose to which it is being put by Global X Investments Canada Inc.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the “Global X Funds”) managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.

Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.

All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.

Global X Investments Canada Inc. (“Global X”) is a wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group.  Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.

© 2025 Global X Investments Canada Inc. All Rights Reserved.

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Global X Investments Canada Inc.

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Toronto, Ontario M5J 2H7

Commissions, management fees, and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their values change frequently and past performance may not be repeated. Certain Global X Funds may have exposure to leveraged investment techniques that magnify gains and losses which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The Global X Money Market Funds are not covered by the Canada Deposit Insurance Corporation, the Federal Deposit Insurance Corporation, or any other government deposit insurer. There can be no assurances that the money market fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the Funds will be returned to you. Past performance may not be repeated. The prospectus contains important detailed information about the Global X Funds. Please read the relevant prospectus before investing.

The indicated rates of return are the historical annual compounded total returns, including changes in share/unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges, or income taxes payable by any securityholder that would have reduced returns. The rates of return above are not indicative of future returns. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated. Only the returns for periods of one year or greater are annualized returns.

Certain ETFs are alternative investment funds (“Alternative ETFs”) within the meaning of the National Instrument 81-102 Investment Funds (“NI 81-102”) and are permitted to use strategies generally prohibited by conventional mutual funds, such as the ability to invest more than 10% of their net asset value in securities of a single issuer, the ability to borrow cash, to short sell beyond the limits prescribed for conventional mutual funds and to employ leverage of up to 300% of net asset value. While these strategies will only be used in accordance with the investment objectives and strategies of the Alternative ETFs, during certain market conditions they may accelerate the risk that an investment in ETF Shares of such Alternative ETF decreases in value. The Alternative ETFs will comply with all requirements of NI 81-102, as such requirements may be modified by exemptive relief obtained on behalf of the ETF.

“Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and “TSX®” is a registered trademark of the TSX Inc. (“TSX”). These marks have been licensed for use by Global X Investments Canada Inc. The ETF is not sponsored, endorsed, sold, or promoted by the S&P, TSX, or their affiliated companies and none of these parties make any representation, warranty, or condition regarding the advisability of buying, selling or holding units/shares of the ETF.

Nasdaq®, Nasdaq-100®, and Nasdaq-100® Index are trademarks of The NASDAQ OMX Group, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Global X Investments Canada Inc. The Fund(s)have not been passed on by the Corporations as to their legality or suitability. The Fund(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND(S) or PRODUCT(S).

The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with Global X Investments Canada Inc. (“Global X”) and any related funds.

The Global X Russell 2000 Index ETF and the Global X Russell 2000 Covered Call ETF (in this disclaimer, the “Russell 2000 Funds”) have been developed solely by Global X Investments Canada Inc. The Russell 2000 Funds are not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell 2000 RIC Capped Index (the “Index”) vest in the relevant LSE Group company which owns the Index. Russell® is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Russell 2000 Funds. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Russell 2000 Funds or the suitability of the Index for the purpose to which it is being put by Global X Investments Canada Inc.

This communication is intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase investment products (the “Global X Funds”) managed by Global X Investments Canada Inc. and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies. These investments may not be suitable to the circumstances of an investor.

Certain statements may constitute a forward-looking statement, including those identified by the expression “expect” and similar expressions (including grammatical variations thereof). The forward-looking statements are not historical facts but reflect the author’s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking statements. These forward-looking statements are made as of the date hereof and the authors do not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.

All comments, opinions and views expressed are generally based on information available as of the date of publication and should not be considered as advice to purchase or to sell mentioned securities. Before making any investment decision, please consult your investment advisor or advisors.

Global X Investments Canada Inc. (“Global X”) is a wholly-owned subsidiary of Mirae Asset Global Investments Co., Ltd. (“Mirae Asset”), the Korea-based asset management entity of Mirae Asset Financial Group. Global X is a corporation existing under the laws of Canada and is the manager, investment manager and trustee of the Global X Funds.

© 2025 Global X Investments Canada Inc. All Rights Reserved.