Q2 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The global economy steadied in the second quarter after the energy shock that dominated the start of the year. Crude oil prices stayed high through much of the quarter before retreating late in the period as tensions in the Middle East eased and shipping through the Strait of Hormuz began to resume. The pullback in oil lowered input costs for energy-importing economies and helped cool fears of a broader inflation shock.

Major central banks stayed cautious. The U.S. Federal Reserve Board (Fed) and the Bank of Canada both kept interest rates unchanged, and the Fed signaled that rate increases were possible later in the year. The European Central Bank raised its policy interest rates at its June meeting in response to rising inflationary pressures.

Global fixed income markets delivered mixed results. U.S. government bond yields rose as the market priced in the possibility of Federal Reserve rate increases, while Canadian yields eased late in the quarter. Investment-grade corporate bonds were broadly resilient, particularly energy-sector issuers, while high-yield bonds were mixed.

Global equity markets rose in the second quarter. Developed markets gained about 13%, led by a strong rally in the U.S. Japanese equities delivered a strong return, supported by firm economic data and continuing corporate governance reforms, though a weaker yen stayed in focus for policymakers. Emerging markets outperformed, rising close to 23%, led by extraordinary gains in South Korea and Taiwan on demand tied to artificial intelligence and semiconductors, while Chinese and Indian equities lagged.

Performance

Exposure to Taiwan, underweight exposure to the communication services sector and stock selection in energy contributed to performance. Overweight exposure to Lam Research Corp., Alphabet Inc. and Teck Resources Ltd. Also contributed to performance.

Underweight exposure and selection in the U.S. detracted from performance. Stock selection in information technology, financials and industrials also detracted from performance, as did underweight exposure to information technology. Exposures to CME Group Inc., Agnico Eagle Mines Ltd. and CGI Inc. detracted from performance.

In fixed income, currency positioning in corporate bonds contributed to performance, particularly in industrials, energy and communication services.

Portfolio activity

The sub-advisor increased Royal Bank of Canada and reduced Agnico Eagle Mines Ltd. and Canadian Natural Resources Ltd. These transactions were made based on the sub-advisor’s investment process.