Investing Perspectives Q3 2025

Market Recap

The third quarter delivered solid returns across most major asset classes, though the backdrop remains far from straightforward. Risk-taking was rewarded, but structural headwinds persist. Inflation is cooling but sticky, policy remains fluid, and valuations in several market segments leave little margin for error.

Global equities advanced again in Q3 2025, led by large-cap technology and AI-adjacent names. Growth outperformed value, and emerging markets outpaced developed peers for the first time in several quarters. U.S. indices extended year-to-date gains, supported by resilient consumer demand and expectations of eventual monetary easing.

The rally, however, remains highly concentrated: a small cluster of mega-caps continues to dominate performance. Beneath the surface, market participation has thinned, a sign that investor optimism may be shallow.

In the corporate bond market, all-in yields remain elevated as compared to recent historical norms but have moderated meaningfully since peaking in 2022.  Credit spreads tightened modestly in the quarter as risk appetite continues to grow.

Economic data were mixed. The U.S. labour market is gradually cooling; inflation is easing but still above target; and central banks continue their delicate effort to engineer a soft landing without reigniting price pressures. Commodity prices were broadly range-bound, though energy and industrial metals remain sensitive to supply disruptions and trade friction.

When The Experts Sound The Alarm–And Markets Don’t Listen

“Valuations are at levels that history shows simply cannot be sustained. Market breadth has narrowed to a handful of dominant names, speculation has reached fever pitch, and investor psychology is back to the late-cycle euphoria we saw in 1929, 2000, and 2021.”

Those lines could easily have come from a strategist this month.  Yet they are paraphrased from words written by famed investor Jeremy Grantham in 2022, when he warned investors that U.S. equities had entered a “super bubble” likely to unwind with losses exceeding 50%.

Three years later, that collapse has yet to arrive. Instead, major indices sit near record highs, led by the same mega cap technology stocks he cited as evidence of mania. His reasoning wasn’t absurd: valuations were stretched, liquidity abundant, and speculation rampant. But markets rarely conform to tidy timelines. Even the most seasoned investors can diagnose stretched valuations correctly yet misjudge when it will matter.

The lesson isn’t to dismiss caution; it’s to recognize how punishing market-timing can be. The conditions that alarmed Grantham then, including market concentration, lofty valuations, and policy uncertainty, remain visible today. They are reasons to stay disciplined, not to retreat from the market wholesale.

At Bridgeport, we view such high-profile warnings as reminders rather than roadmaps. Valuation discipline and diversification still anchor our process, but humility and patience are just as critical. Forecasting the exact moment when optimism turns to fear is futile. The smarter course is to remain invested, stay balanced and position portfolios so they can endure the unexpected without relying on prediction.

Our Portfolios

A few themes have defined performance across Bridgeport’s publicly traded equity funds this year.  The first is capitalizing on temporary share price dislocations for high-quality businesses 

Applied Materials declined earlier in the year as tariff rhetoric targeted the semiconductor industry.  We viewed those concerns as short-term noise. With U.S. policy now emphasizing domestic chip production, Applied Materials is positioned to benefit from both global and onshore manufacturing demand as a key industry supplier.

Uber Technologies sold off earlier in the year amid speculation that autonomous vehicles would disrupt its business model. In reality, self-driving technology remains years away from commercial scale, and leading developers such as Waymo have chosen to partner with, rather than compete against, Uber’s established network. As the market has recognized this, Uber’s share price rebounded strongly.

Thermo Fisher Scientific weakened on fears of reduced research funding and tariff exposure toward the end of the first quarter. We assessed both risks as limited given the company’s diversified customer base and strong pricing power. That assessment proved accurate as the share recovered.

These investments helped Bridgeport US Equity Fund advance 9% year-to-date through September 30.

Turning to the Canadian market, the Bridgeport Canadian Equity Fund has been our best performing strategy in 2025, earning an 18% return through September 30. The fund has benefited from our second investment theme:  identifying companies whose underlying strengths are underappreciated by the market. Two standouts are Cameco and Rogers Communications.

Cameco has been our top performer this year. We viewed it through the lens of the AI-driven surge in electricity demand. Powering data centres requires vast, consistent energy and nuclear is increasingly recognized as a critical solution. With world-class uranium assets and disciplined management, Cameco is positioned at the centre of this trend. 

Rogers Communications has also contributed meaningfully. An often-overlooked source of value lies in its ownership stakes in major Canadian sports franchises including the Blue Jays, Maple Leafs and Raptors. These assets represent significant embedded worth that we believe remains underestimated by the market (a Blue Jays World Series win wouldn’t hurt visibility!).  

Our third theme this year has been corporate takeovers. Three of our holdings were acquired during the quarter, bringing the year-to-date total to five. We never invest expecting takeovers, but they remain one of several ways disciplined investing in quality businesses can create value. 

• Teck Resources – Added after a weak quarter based on our conviction in copper demand; subsequently acquired by Anglo American, producing a rapid gain.
• DentalCorp – A long-standing position entered when its roll-up phase slowed and cash flow potential strengthened; now being acquired by a private equity firm at a significant premium to our purchase price. 
• Guardian Capital – Acquired by Desjardins, reuniting it with its previously divested distribution arm and validated our investment thesis.

Both Guardian and DentalCorp are Canadian companies held in Bridgeport Small & Mid Cap Equity Fund which has gained 11% on a year-to-date basis.  

Thornmark Enhanced Equity Fund and Thornmark Dividend & Income Fund have advanced 7% and 5%, respectively, since Thornmark joined Bridgeport earlier this year. Both funds benefited from exposure to several of the investments noted above, along with other strong contributors.

Bridgeport High Income Fund also delivered another solid quarter, gaining over 6% year-to-date through September 30. Tightening credit spreads and declining yields supported prices for both bonds and dividend-paying equities.

Performance across our Bridgeport Alternative Income, Private Equity Opportunities, and Private Real Estate & Infrastructure Funds improved in the third quarter after valuation gains across most private assets paused earlier in the year. Year-to-date returns are in the low single digits, with most of that progress occurring in Q3. We expect stronger results in the coming quarters, and we continue to view these strategies as key sources of diversification should public markets encounter volatility.

Recent private asset portfolio additions include allocations to:

• ElmTree, a U.S. manager with over US$7 billion of firm assets under management (AUM) that is focused on acquiring and developing triple net lease, build-to-suit industrial and warehouse properties for blue-chip tenants such as Starbucks and Home Depot;
• A diversified private corporate debt fund managed by Carlyle Group, which oversee AUM of US$450 billion; and
• A senior lending fund managed by Hamilton Lane (firm AUM over US$950 billion).

Final Thoughts

Investors today face a paradox: the macro narrative feels fragile, yet markets remain remarkably resilient. The temptation is to overreact, either by chasing strength or anticipating collapse. Both could be costly errors.

Our job at Bridgeport is not to call the next turning point. It is to ensure that client portfolios can prosper across a range of outcomes, participating in growth, protecting capital in stress and compounding patiently through full cycles.

We thank you for your continued confidence and trust in Bridgeport.  Please reach out with any questions.

Yours truly,

John Fisher

Note:  Bridgeport investment returns disclosed in this report are before fees.