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, though the labour market stabilized and the unemployment rate eased to 6.6% in May. The U.S. economy expanded at a solid pace, supported by resilient consumer spending and business investment. Inflation picked up in both countries, partly because of higher energy costs tied to the conflict in the Middle East.

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

Canadian equities advanced, with the S&P/TSX Composite Index climbing to a record high in June and extending its gain for the year to about 10%, supported by strength in energy early in the quarter. U.S. equities rallied more strongly, with the S&P 500 Index gaining about 15% as semiconductor and artificial intelligence-related stocks led the advance while the largest technology names lagged.

Performance

In equities, underweight exposure to the materials and energy sectors contributed to performance. Overweight exposure to Alphabet Inc. and Aritzia Inc. contributed to the Fund’s performance. Alphabet benefited from continued business execution, while Aritzia made progress against its company-specific growth initiatives.

Underweight exposure to semiconductors and stock selection in information technology detracted from performance. Exposure to Boyd Group Services Inc. and CGI Inc. and overweight exposure to Microsoft Corp. detracted from performance. Boyd Group reported disappointing same-store sales growth. Microsoft posted a modest gain but lagged its peers. CGI was affected by uncertainty about the effect of artificial intelligence (AI) on its business model.

Within fixed income, exposure to government bonds contributed to performance, supported by yield curve positioning. Exposure to corporate bonds detracted from performance.

Portfolio activity

The sub-advisor added Agnico Eagle Mines Ltd. to increase the Fund’s gold exposure.

SAP SE was increased because the sub-advisor believes its software should continue to perform well, despite the potential impact of AI. Dollarama Inc. was increased to benefit from value-seeking consumer behaviour in Canada. Royal Bank of Canada, The Toronto-Dominion Bank and Pembina Pipeline Corp. were also increased.

Some information technology holdings were sold because of the potential impact of AI. Emera Inc., TELUS Corp., Suncor Energy Inc., Alimentation Couche-Tard Inc. and Waste Connections Inc. were reduced.