Mackenzie Ivy International Equity
Mandate commentary
Q3 2024
Highlights
① Stock selection within the health care sector was the single largest contributor to relative performance.
② Active central bank policies were key market drivers.
③ An improving market environment, as interest rates fall.
Mandate overview
Performance was positive over the period and outperformed the benchmark index. Stock selection in the health care, information technology and industrials sectors positively impacted performance relative to the benchmark. This was offset partially by an overweight exposure to the information technology sector, and underweight exposures to financials and utilities, which detracted from relative performance. The best-performing sectors in the quarter were real estate and utilities, and the mandate’s relative performance was hindered by underweight exposures to these sectors.
Mandate: positive returns that outperformed the benchmark
Performance contributors
Stock selection in the health care, information technology and industrials sectors contributed to relative performance.
Stock selection in Europe and Japan contributed to relative performance.
Performance detractors
An overweight exposure to the information technology sector, and underweight exposures to financials and utilities, detracted from relative performance.
An underweight exposure to Africa and the Middle East detracted from relative performance.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
since INC. (NOV. 14, 2016) |
MACKENZIE IVY INTERNATIONAL EQUITY |
12.90% |
16.56% |
30.02% |
3.61% |
6.53% |
5.70% |
Mandate repositioning
The mandate added a position in LVMH Moet Hennessy Louis Vuitton SE during the quarter.
The mandate exited positions in Amcor plc and Carlsberg A/S during the quarter.
The mandate added to existing positions in Unicharm Corporation, Olympus Corporation and SAP SE.
The mandate trimmed its positions in Sonova Holding AG, Seven & i Holdings Co. Ltd, RELX plc, Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Kone Oyj.
Market overview: markets rallied with expanding breadth
Investor sentiment shifted to a “risk-on” attitude in the third quarter, in response to changes in central bank monetary policy across key economies. It began with the Bank of Canada (BoC) and the European Central Bank (ECB) in the second quarter and continued into the third. The BoC was particularly active, making two additional cuts of 25 basis points (0.25 percentage points) to its overnight rate this quarter.
The U.S. Federal Reserve (the Fed) started its own policy easing with a surprise 50 basis-point (0.5-percentage-point) cut in mid-September, launching rallies in both bonds and equity markets. The Fed noted an increase in the unemployment rate and that the battle against inflation was no longer a primary reason to maintain a restrictive monetary policy.
Market outlook: the market environment is generally improving
Looking ahead, central banks in Canada and the United States will continue to focus on supporting labour markets. Stimulus measures in China could help boost domestic consumer demand by propping up the Chinese stock market, property market and economy. Despite geopolitical risks from the Middle East conflict and the upcoming U.S. election, the market environment is improving.
We see a soft-landing scenario emerging in the U.S. and other areas around the world. This should support equity markets and help bond returns, as interest rates continue to fall from where they are today.
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