Q2 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The U.S. economy expanded at a solid pace in the second quarter, supported by resilient consumer spending and business investment. The labour market changed little, and the unemployment rate held broadly steady. Inflation stayed well above the U.S. Federal Reserve Board’s (Fed) 2% target, partly because of higher energy costs tied to the conflict in the Middle East.

The Fed held the federal funds rate steady at a target range of 3.50%–3.75% at its June meeting, keeping its interest rate-cutting cycle on pause. Fed officials adopted a more hawkish tone, and their latest projections pointed to the possibility of interest-rate increases later in the year rather than cuts, as they focused on returning inflation to target.

The U.S. equity market rallied in the second quarter, with the S&P 500 Index gaining about 15%, one of its strongest quarters in years. Semiconductor stocks were strong contributors, rising more than 70% on demand tied to artificial intelligence (AI) infrastructure. The gains came despite elevated valuations and a more cautious interest-rate outlook. The largest mega-capitalization technology stocks lagged the broad market and were little changed for the year, as investors questioned the timing of returns on heavy AI spending.

Technology companies delivered mixed results. Semiconductor and artificial intelligence-related names rose sharply on strong demand for computing infrastructure, while the largest mega-capitalization technology firms, including Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Meta Platforms Inc., lagged the broad market as investors weighed the scale of their AI spending against the timing of returns.

Performance

Overweight exposure to the industrials sector contributed to performance. The Fund’s exposure to Applied Materials Inc. and Snowflake Inc. contributed to performance.

Stock selection in the information technology sector detracted from performance. Lack of exposure to Sandisk Corp. and Intel Corp. detracted from performance.

Portfolio activity

The sub-advisor added International Business Machines Corp. (IBM) and Salesforce Inc. to the Fund. Snowflake Inc. and Palantir Technologies Inc. were increased. Accenture PLC and Netflix Inc. were sold, while CGI Inc. and ASML Holding NV were reduced.