Mackenzie Ivy International Equity
Mandate commentary
Q4 2024
Highlights
① An underweight allocation to the materials sector was the single largest contributor to relative performance.
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
Performance was negative and outperformed the benchmark. An underweight allocation to the materials sector and overweight allocations to consumer discretionary and information technology positively impacted performance relative to the benchmark. This was offset partially by stock selection in the financials, industrials and communication services sectors, which detracted from relative performance. The best performing sector in the quarter was financials and the mandate’s relative performance was hindered by an underweight allocation to this sector.
Mandate: negative returns that outperformed the benchmark
Performance contributors
An underweight allocation to the materials sector, as well as overweight allocations to consumer discretionary and information technology, contributed to relative performance.
An underweight allocation to Europe contributed to relative performance.
Performance detractors
Stock selection in the financials, industrials and communication services sectors detracted from relative performance.
Stock selection in Japan detracted from relative performance.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
since INC. (NOV. 14, 2016) |
MACKENZIE IVY INTERNATIONAL EQUITY |
-7.53% |
7.78% |
7.78% |
0.34% |
3.66% |
4.51% |
Mandate repositioning
The mandate added positions in L’Oreal SA, Daikin Industries Ltd., Ajinomoto Co. Inc., Spirax Group plc, InterContinental Hotels Group plc and Adyen NV during the quarter.
The mandate exited positions in Sonova Holding AG, Alibaba Group Holding Ltd. and Heineken NV during the quarter.
The mandate added to existing positions in LVMH Moët Hennessy Louis Vuitton SE and Merck KGaA.
The mandate trimmed its positions in Seven & I Holdings Co. Ltd., RELX plc, Kone Oyj, Auto Trader Group plc, SAP SE and Taiwan Semiconductor Manufacturing Co. Ltd.
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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