Mackenzie North American Value Equity
Mandate commentary
Q4 2024
Highlights
① The mandate had positive returns and underperformed the benchmark. An underweight exposure to the real estate sector both in Canada and the U.S. contributed positively to overall performance while negative stock selection in the information technology and industrials sectors detracted from overall 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 positive over the period and underperformed the benchmark. The Canadian market outperformed the U.S. market this past quarter (in local currency terms). Positive stock selection in the consumer staples sector and an underweight position in the real estate sector in Canada contributed positively to returns relative to the benchmark. This was offset by negative stock selection in the industrials and information technology sectors.
In the U.S., positive stock selection in the financials sector contributed positively to returns relative to the benchmark. This was offset by negative stock selection in the industrials, consumer discretionary and information technology sectors.
Mandate: positive returns and underperformed the benchmark
Performance contributors
Positive stock selection in the Canadian consumer staples sector and an underweight exposure to the real estate sector contributed to relative performance.
Positive stock selection in the U.S. financials sector and an underweight exposure to the real estate sector contributed to relative performance.
Performance detractors
Negative stock selection in the Canadian industrials and information technology sectors detracted from relative performance.
Negative stock selection in the U.S. consumer discretionary, industrials and information technology sectors also detracted from relative performance.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
SINCE INC. (NOV. 14, 2016) |
MACKENZIE NORTH AMERICAN VALUE EQUITY |
2.12% |
19.10% |
19.10% |
8.90% |
11.33% |
9.23% |
Mandate repositioning
The fund modestly added to some existing positions such as Alimentation Couche-Tard Inc. and initiated a new position in Waste Connections Inc.
The fund trimmed its positions in TC Energy Corporation and Telus Corporation.
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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