Mackenzie Canadian Dividend Equity
Mandate commentary
Q4 2024
Highlights
① Returns were positive for the mandate. Negative stock selection in the information technology and industrials sectors led to underperformance against the benchmark.
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 performed positively over the period and underperformed its benchmark. The broader Canadian market had moderate returns in the quarter. Positive stock selection in the consumer staples sector contributed positively to returns relative to the benchmark. This was offset by negative stock selection in the industrials sector, as well as an underweight position and negative stock selection in the information technology sector.
Mandate: overall positive returns but underperformed the benchmark
Performance contributors
Positive stock selection in the consumer staples sector contributed positively to relative performance over the period.
Performance detractors
Negative stock selection in the industrials sector, along with an underweight position and negative stock selection in the information technology sector, 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 |
0.90% |
14.66% |
14.66% |
8.15% |
9.22% |
8.38% |
Mandate repositioning
The fund initiated a new position in Waste Connections Inc.
The fund trimmed its positions in Telus Corporation and Barrick Gold Corp.
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.
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