Views From The Vista Financial Group June 2025

Spring is here, bringing its usual mix of sunshine, showers, and surprises.

 As the season shifts, so too do the markets and global events, keeping us alert and adaptable. In this spirit of change and renewal, we’re pleased to share our latest quarterly update with insights to help you stay informed and confident in your financial journey.

Team Update

We are excited to share that Marie has earned a well-deserved promotion to Associate Wealth Advisor, a role she has been diligently working toward. If you haven’t already had a review call with her, you may, in the near future, and you’ll likely notice her increased involvement in meetings and client interactions. While she will continue to manage her existing administrative responsibilities, her new role allows her to contribute at a higher level with expanded capacity.

Market and Economic Update

Markets Rebound on Tariff Truce
Global markets rallied in May following a temporary easing of U.S.-China trade tensions. A 90-day suspension of tariffs helped lift investor sentiment, with US stocks rebounding on strong corporate earnings and better-than-expected retail and manufacturing data. (1)

Mixed Signals in the U.S.
Despite the market rally, the U.S. economy contracted by 0.3% in Q1. Inflation slowed to 2.3% in April, and the Federal Reserve held interest rates steady at 4.25-4.5%. The job market remained resilient, with 177,000 jobs added in April and unemployment steady at 4.2%. (1)

Canada’s Economic Outlook - Growth Slows Amid Global Uncertainty
Canada’s economy is forecast to grow by just 1.6% in 2025, down from 1.8% earlier this year. The slowdown is attributed to weaker private investment and global trade uncertainty. The OECD projects even slower growth at 1.0%, citing Canada’s vulnerability to global manufacturing and trade disruptions. (2, 3)

Navigating Uncertainty: Risks and Resilience in 2025
The global economic outlook has softened, with growth projected to slow to 2.4% in 2025, down from 2.9% in 2024. Persistent trade tensions, policy uncertainty, and elevated bond yields continue to weigh on investment and consumer spending worldwide. (2)

However, there are encouraging signs:

• Inflation is easing in several major economies, giving central banks more flexibility to support growth.
• Labour markets remain resilient, particularly in North America, helping to sustain household consumption.
• Recent tariff reductions between the U.S. and China have improved market sentiment and may pave the way for more stable trade relations.
• Technological investment and green energy transitions are gaining momentum, offering long-term growth potential despite short-term headwinds. (4)

1. https://omnisinvestments.com/news/2025/market-update-june-2025
2. https://www.un.org/development/desa/dpad/publication/world-economic-situation-and-prospects-june-2025-briefing-no-190/
3. https://www.cbc.ca/news/business/oecd-lowers-global-outlook-trump-trade-war-1.7550723
4. https://www.oecd.org/en/publications/oecd-economic-outlook-volume-2025-issue-1_83363382-en.html

Newsletter Highlight – Autocall Structured Notes

We incorporate autocallable notes across many of our portfolios as a strategic tool to enhance returns. These instruments can offer attractive yields when the underlying asset performs within expected ranges over time. Our selection process is highly targeted, focusing on sectors where we anticipate long-term value growth. While these notes include a level of principal protection, there is a risk of capital loss if the underlying asset declines significantly—typically beyond a barrier of around -30%.

What Are They? A Simplified Explanation

Autocallable barrier notes are a type of investment where you can earn a set amount of money (a fixed return) if a certain stock or index (called the "reference asset") performs in a certain way. There's a chance the investment ends early and pays you back with profit (this is the "autocallable" part). Your original money (the principal) is somewhat protected, but only if the reference asset doesn’t fall too much by the time the investment ends.

Think of it like a bet with safety nets: you might win early, you might wait until the end, and you might get your money back, unless things go badly, which would be a very rare event.

If the note doesn’t get called early, your original investment is protected at maturity—as long as the underlying asset hasn’t dropped below a certain level (the downside barrier).

Key Features

• You could earn more than if you invested directly in the underlying asset.
• You might get your original investment back early, along with a fixed return, if certain conditions are met.
• Your investment is protected at maturity—unless the asset drops below a set level.

How Do They work?

Returns are tied to the performance of a stock, commodity, currency, or a mix of these (the reference asset). If the reference asset performs well and crosses a set threshold on certain dates, the note is “called” early, and investors receive a fixed return—plus possibly more, if the asset return is higher. At maturity, if the asset has dropped but stays above a set loss limit (the downside barrier), investors get their full investment back. If it falls below that barrier, investors take a loss equal to the asset’s decline.

Downsides

• Risk of Loss: If the underlying asset drops below a certain level (the downside barrier), you could lose part of your original investment.
• Limited Upside: Your returns are capped. Even if the asset performs extremely well, you only get the fixed return—not the full gains of the asset.
• Early Call Risk: If the note is called early, you might miss out on future gains or better investment opportunities.
• Complexity: These products can be hard to understand, especially how returns and risks are calculated.
• Market Dependency: Your returns depend on how the reference asset performs, which can be unpredictable.
• Liquidity Risk: It may be hard to sell the note before maturity without taking a loss, as there might not be a ready market.

Many of our clients are already familiar with this investment offering. If you haven’t yet had the opportunity to explore it, there’s a good chance we’ll be reaching out to discuss how it might fit into your portfolio. In the meantime, if you have any questions, about this investment or any other aspect of your portfolio, please don’t hesitate to contact us. We’re always happy to assist.

Thank You

As always, we want to take a moment in our newsletter to express our sincere appreciation for the trust you place in us. Thank you for choosing us as your partners in your financial journey. It’s a role we approach with both gratitude and a deep sense of responsibility.

We understand that financial decisions are personal and impactful, and we’re honoured to support you in this important part of your life. Whether we’re helping you plan for the future, navigate changing markets, or simply offering guidance along the way, we’re committed to being a steady and thoughtful presence.

Your continued confidence means the world to us, and we look forward to growing with you in the years ahead.

Friends and Family

We’d also like to take this opportunity to remind you that we offer complimentary consultations for your family and friends. Whether they’re new to working with a wealth advisor or simply seeking a second opinion, we’re happy to provide guidance tailored to their needs.

Your referrals are a reflection of the trust you place in us, and we consider it a privilege to support the financial well-being of those closest to you. After all, the success of your friends and family is a shared success.

Sincerely,

Vista Financial Group