ClearBridge Canadian Equity
Mandate commentary
Q4 2024
Highlights
① The mandate advanced moderately in the last quarter of 2024, a period with mixed equity markets and rising volatility.
② North American equities finished the year strongly on the back of post-election optimism.
③ A continued easing of monetary policy helped boost performance.
Mandate overview
The mandate underperformed the S&P/TSX Composite Index in the fourth quarter of 2024. Negative sector allocation effects were the primary detractors from relative performance, further augmented by adverse security selection effects.
The most significant relative detractors included the overweight position in the interest-rate sensitive communication services and utilities sectors, plus the mandate’s underweight position and poor stock selection in the information technology and financials sectors. A few bright spots included an underweight position and stock selection within the materials sector, as well as strong stock selection in the industrials sector.
From an absolute return standpoint, the most material positive contributors to the mandate’s performance were holdings within the financials, energy and industrials sectors.
Mandate: positioned defensively
Performance contributors
Positioning in materials: an underweight position and stock selection within the sector was the largest positive contributor to relative performance.
AtkinsRealis: the overweight position in the outperforming equity was the largest contributor from a single stock standpoint.
Performance detractors
Positioning in information technology: an underweight position and stock selection within the sector was the largest relative performance detractor.
Shopify: the underweight position in the outperforming IT services company was the largest detractor from a single stock standpoint.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
since INC. (NOV. 14, 2016) |
CLEARBRIDGE CANADIAN EQUITY |
1.80% |
17.36% |
17.36% |
9.98% |
11.31% |
9.83% |
Mandate repositioning
Trading activity was heightened in the fourth quarter of 2024 as the ongoing strength in equity markets presented several opportunities to trim on strength and prioritize new and existing positions within the Mandate. Transactions also included trimming select holdings on strength within the energy, utilities and industrials sectors.
With superior predictability and downside protection available at a reasonable price, the Mandate’s current positioning can provide ballast in more challenging equity market environments, allows the Mandate to power ahead with predictable growth, and serves as dry powder when better risk/reward opportunities arise.
At year end, the Mandate’s largest sector exposures were financials, industrials and energy. Relative to the benchmark, it has overweight exposures to the generally defensive consumer staples and utilities sectors, as well as industrials. The Mandate has its most notably underweight exposures to the typically value/cyclical oriented financials, materials and energy sectors.
Market overview: the U.S. dollar and equities dominated the quarter
Investor sentiment turned optimistic in the fourth quarter of 2024, as equities rallied to close the year on a high note. Three defining themes shaped the quarter: a historic U.S. presidential election, ongoing central bank rate cuts and a rise in political risks both domestically and abroad. Collectively, these factors drove market movements, creating an optimistic and rewarding environment for investors following the decisive U.S. election.
Global central banks continued to ease their monetary policies, shifting the focus from combating inflation to supporting economic growth and labour market stability. The Bank of Canada (BoC) cut its overnight rate twice by 50 basis points (half a percentage point) each time, for a total reduction of one percentage point during the quarter, bringing the overnight rate to its lowest level in over two years. Similarly, the U.S. Federal Reserve followed its September cut with two consecutive reductions of one-quarter percentage point each.
Market outlook: global economies are set up for growth into 2025
Our outlook for 2025 is optimistic. With inflation no longer a major concern, central banks can continue their supportive policies. Although political risks remain, the global economic environment seems favourable, and corporate earnings are projected to improve. The historically strong performance in the fourth quarter for sectors like consumer discretionary and financials underscored a solid foundation as we enter the new year.
To discuss your investment strategy, speak to your IG Advisor.
Azure Managed Investments™ provides discretionary investment management services distributed by Investors Group Securities Inc. (“IGSI”). IGSI will manage your Azure Managed Investments Accounts on a segregated basis in accordance with your investment policy statement and the resulting mandate selected by you. Mandates will be managed by Mackenzie Financial Corporation. You are required to make a minimum initial investment of $150,000; please read the Azure Managed Investment Account Agreement for complete details, including fees and expenses.
This commentary may contain forward-looking information which reflects our or third-party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and do not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of December 31, 2024. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.
This commentary is published by IG Wealth Management. It is provided as a general source of information. It is not intended to provide investment advice or as an endorsement of any investment. Some of the securities mentioned may be owned by IG Wealth Management or its mutual funds, or by portfolios managed by our external advisors. It may contain certain forward-looking statements regarding the market conditions which are based upon assumptions believed to be reasonable at the time of publishing. Every effort has been made to ensure that the material contained in the commentary is accurate at the time of publication, however, IG Wealth Management cannot guarantee the accuracy or the completeness of such material and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein.
Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations.
© Investors Group Inc. 2025