Q2 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

North American economies followed different paths in the second quarter. Canada’s economy stayed under pressure from trade uncertainty, while the U.S. economy expanded at a solid pace. Inflation picked up in both countries because of higher energy costs tied to the conflict in the Middle East, though oil prices retreated late in the quarter as tensions eased.

Monetary policy stayed on hold in both countries. The Bank of Canada held its policy interest rate steady at 2.25% at its April and June meetings, while the U.S. Federal Reserve Board held the federal funds rate steady at a target range of 3.50%–3.75% and signaled that rate increases were possible later in the year.

Multi-sector fixed income delivered mixed results. U.S. government bond yields rose as the market priced in the possibility of Fed rate increases, putting downward pressure on prices, while Canadian bond yields eased late in the quarter on contained inflation. Investment-grade corporate bonds were broadly stable, and energy-sector issuers held up well. High-yield bonds were choppy but finished higher as the interest-rate outlook shifted.

Performance

Exposure to utilities contributed to performance, as did select industrials and loan exposures. Galaxy Digital Holdings LP (0.5%, 2031/05/01) was the largest contributor to performance. It benefited from better sentiment toward digital assets, supported by stronger cryptocurrency prices and growing institutional adoption.

Security selection among corporate holdings detracted from performance, particularly the industrials, energy and financials sectors. Cannabist Company Holdings Inc. (9.25%, 2028/12/31) detracted from performance as it faced pressure from pricing compression, regulatory uncertainty, and lower access to capital.

Portfolio activity

Blackstone Private Credit Fund (5.95%, 2031/05/15) was added for its scale, sponsor affiliation and mostly first-lien portfolio. This may support resilient credit performance through economic cycles.

Light and Wonder International Inc. (6.25%, 2033/10/01) was increased based on its lower debt, market position and regulated gaming market. The bond has the potential to participate in ongoing credit improvement while earning an attractive yield.

Frontier Communications Corp. (6.75%, 2029/05/01) was eliminated. Following its financial restructuring several years ago, the company invested in network modernization and fiber deployment to improve customer growth and cash flow.

Ashton Woods USA LLC (4.625%, 2029/08/01) was reduced. While the sub-advisor believes in the issuer’s ability to generate profit, its valuation doesn’t compensate for industry risks and private-company ownership.