Mackenzie North American Value Equity
Mandate commentary
Q1 2024
Highlights
① Returns were positive for the mandate. Negative stock selection in the financials sector and in the U.S. industrials sector contributed to overall underperformance against the broad 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
Performance was positive over the period and underperformed the benchmark index. The U.S. market outperformed the Canadian market this past quarter. Positive stock selection in the consumer discretionary and information technology sectors in the U.S. contributed positively to returns relative to the benchmark. This was offset by negative stock selection in the industrials and energy sectors.
In Canada, 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 financials and utilities sector.
Mandate: Positive returns underperformed the benchmark.
Performance contributors
Positive stock selection in the Canadian consumer staples sector and in the energy sector contributed to relative performance.
Positive stock selection in the U.S. consumer discretionary sector and in the information technology sector contributed to relative performance.
Performance detractors
Negative stock selection in the Canadian financials and utilities sectors detracted from relative performance.
Negative stock selection in the U.S. industrials and energy sectors detracted from relative performance.
Total gross returns:
Total return |
QTD |
YTD |
1YR |
3YR |
5YR |
SINCE INC. (NOV. 14, 2016) |
MACKENZIE NORTH AMERICAN VALUE EQUITY |
7.50% |
7.50% |
17.74% |
11.03% |
10.92% |
8.70% |
Mandate repositioning
The fund added to existing positions in a number of companies including TC Energy Corporation., Emera Inc. and Brookfield Asset Management Ltd.
The fund exited its positions in a number of companies including Enbridge Inc., Barrick Gold Corporation and Northland Power Inc.
The fund trimmed its positions in Loblaw Companies Ltd and Agnico Eagle Mines Ltd.
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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