Mackenzie Canadian Dividend Equity
Mandate commentary
Q1 2024
Highlights
① Returns were positive for the mandate. Negative stock selection in the financials and industrials sectors led to underperformance against the benchmark index.
② Central banks face divergent monetary policies.
③ Market momentum and encouraging economic data point to more upside potential in 2024.
Mandate overview
The mandate performed positively over the period and underperformed its benchmark index. The broader Canadian market was generally strong in the quarter.
Positive stock selection in the consumer staples sector and in the materials sector contributed positively to returns relative to the benchmark.
This was largely offset by negative stock selection in the financials, industrials and utilities sectors.
Mandate: Overall positive returns but underperformed the benchmark.
Performance contributors
Positive stock selection in the consumer staples sector and the materials sector contributed positively to relative performance over the period.
Performance detractors
Negative stock selection in the financials, industrials and utilities sectors detracted from relative performance over the period.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
since INC. (NOV. 14, 2016) |
MACKENZIE CANADIAN DIVIDEND EQUITY |
5.81% |
5.81% |
12.71% |
10.15% |
8.99% |
8.08% |
Mandate repositioning
The fund initiated a new position in Cenovus Energy and added to the existing position in Finning International Inc.
The fund trimmed its position in TC Energy Corporation.
Market overview: Leap year liftoff – Q1's market highs.
In the first quarter, equity markets delivered a solid performance, reinforcing the sentiment that inflation is nearly under control and recession fears for the U.S. economy are subsiding.
The U.S. maintained a positive economic outlook, whereas Canada has experienced several months of subdued GDP growth, highlighting divergent economic narratives between the two closely linked markets. This contrast may lead the Bank of Canada to enact policy changes before the U.S. Federal Reserve, to address Canada's specific economic hurdles.
Market outlook: Exceptionally strong quarter leads to investor confidence.
As we look ahead, the market's optimism has notably improved from six months ago. U.S. equity markets appear to be priced to perfection, and continued positive economic news is essential to support valuations in the near term. Canadian markets, meanwhile, have been riding the surging wave of global crude prices. This boon from the energy sector is bolstering the country's economic and stock market performance, providing a buffer that could mitigate the impact of a sluggish consumer sector, should higher oil prices persist.
Internationally, markets are on the upswing, rallying from a period of low stock valuations and slow manufacturing. Historically, these signs have often led to a phase of strong economic growth.
We’re encouraged by the momentum in the markets and inflection points in the economic data to the upside, and that leaves us with an optimistic view for investors through the remainder of 2024.
To discuss your investment strategy, speak to your IG Consultant.
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