Staying the course rewarded patient investors ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ View Online Quarterly Performance Update Steve Katuska — Senior Director, Investment Research July 27, 2026 Patience pays off (again) Hi there, If you followed the markets closely in the second quarter, you’re probably still feeling the whiplash. Every new development in the conflict in Iran pushed the markets up or down to varying degrees. In early April, crude oil was trading near US$120 per barrel, causing fears of a protracted economic slowdown. By the end of June, that price was (temporarily) back below US$70, and a mighty rally in equity markets led to one of the strongest performing quarters in years. The other big factor buoying stock prices in the second quarter was better-than-expected earnings, particularly from technology companies. This was due primarily to investors’ growing confidence that AI adoption will continue to expand corporate margins by increasing productivity per worker, as well as the expectation that increased spending on data centers will provide an additional boost to the economy. Overall, the path was volatile. But investors who stayed the course this past quarter were rewarded for doing so. How our portfolios performed For most Wealthsimple Managed Investing clients, the losses absorbed in March have been fully recovered, and much more. Depending on the specific asset allocation, our portfolios are up 6%–14% over the quarter. The TSX 60, S&P 500, and MSCI EAFE — fundamental exposures across all of our Managed portfolios — were up 8.2%, 17.5%, and 13.0%, respectively. Fixed income markets were broadly flat, despite the oil-led inflation concerns I mentioned before. The one key laggard was gold, which dropped about 12% over the quarter, in large part because many central banks liquidated some of their gold holdings as countries looked to subsidize rising energy costs. How we approach conditions like this In the last performance update, I wrote about how geopolitical shocks tend to feel crippling in the moment but eventually have only a temporary impact on markets. So far that’s held true. While we can’t promise or predict that the next geopolitical event will resolve as cleanly for your portfolio, this pattern — a large event, a precipitous impact on markets, and a full recovery — does have an established record throughout history. Just look at the Arab oil embargo, Black Monday, 9/11, the global financial crisis, and COVID. In the moment, they all looked like reasons this time was different. And each time, disciplined, patient investors were ultimately rewarded. That doesn't mean every shock resolves quickly or favourably. It means that the long-run case for staying diversified and invested doesn't depend on being right about the path — it depends on not making irreversible decisions under temporary uncertainty. What’s next Three things appear likely to shape this next quarter: The eventual reopening of the Strait of Hormuz. The single biggest risk factor from the first half of the year looks like it will continue to be one in the second. Stress over the world’s oil supply has already left marks on the economic landscape that will take time to work through. Elevated inflation. Even if fuel costs make a more-permanent retreat, a pop in economic growth might leave Central Banks with no choice but to raise rates to combat higher inflation. That’s especially true in the States, where Kevin Warsh was sworn in as the new Chair of the U.S. Federal Reserve in late May. He inherited a complicated moment — above-target inflation, a divided committee, and explicit political pressure to cut rates — and it will be interesting to see how he reacts. Increased corporate earnings. Earnings per share on the S&P 500 grew nearly 28% year-over-year in the first half of 2026. That means companies have a lot more cash to spend on making their business better. This is particularly relevant in tech, where costs are relatively fixed, so more revenue means higher profit margins. The AI investment cycle remains a powerful tailwind, and while valuations aren't cheap, they're seemingly supported by fundamentals rather than pure sentiment. In markets, even though the TSX has slightly lagged its U.S. counterparts so far this year, having some money invested in Canadian companies is still a smart choice. We are continuing to watch the Bank of Canada's path carefully, particularly if lower oil prices return to ease some of the inflation pressure that had complicated the country’s rate outlook. We remain confident in the portfolio principles and positioning we have in place. Our portfolios are diversified across geographies and asset classes, invested for the long-term and not trying to time markets, and optimized for things we can control, like fees. The quarter validated that approach. As always, if you have questions about what this means for your specific situation, we're here. All the best, Steve Katuska Senior Director, Investment Research Did you like this newsletter? Your feedback (even if it's just to complain) helps us get better. If you're feeling chatty, after you rate us below you'll get the opportunity to share more detailed feedback — including topics you wish we'd cover. Yes No Wealthsimple, 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Refer a Friend Privacy Policy Unsubscribe Replies to this email address are not monitored. Have questions? Contact us. This update is intended for informational purposes only and does not constitute investment advice. Past market behaviour during geopolitical events is not a guarantee of future results. All information and commentary provided is for illustration purposes only and is not investment advice or recommendations. All investments involve risk. To get more info on our products, investment decisions, fee schedules, user testimonials, promos & more visit wsim.co/disclaimers Indicated performance data are historical for the period indicated. Rates of return do not take into account any fees or tax payable. Past performance may not be repeated. Managed accounts are offered by Wealthsimple Investments Inc. (WSII), a member of the Canadian Investment Regulatory Organization (CIRO). No purchase required. 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