Q1 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

North American economies diverged notably in the first quarter. Canada’s economy remained under pressure from trade uncertainty and a soft labour market, with employment declining in January and February before stabilizing in March. The U.S. economy started the year with resilient consumer spending and business investment, but market sentiment deteriorated sharply after the outbreak of the conflict in the Middle East in late February raised concerns about energy prices and inflation.

Monetary policy remained on hold in both countries throughout the quarter. The Bank of Canada held its policy rate at 2.25% at both its January and March meetings, while the U.S. Federal Reserve Board maintained the federal funds rate at 3.50%–3.75% at the same meetings. Canada’s unemployment rate was 6.7% in March, and the U.S. rate was 4.3%.

Canadian equities rose about 4% in the first quarter, outperforming global peers as the energy sector benefited from the sharp rise in crude oil prices following the closure of the Strait of Hormuz. Materials also contributed, supported by a record gold price early in the quarter. The Canadian equity market performed relatively well amid a broad global equity decline.

U.S. equities declined, with the S&P 500 Index falling about 4.4%. Large-capitalization technology and growth-oriented stocks led the decline as rising oil prices and inflation concerns weighed on investor confidence. The energy sector was an exception, advancing with oil prices. Smaller-capitalization and value-oriented stocks outperformed the large-cap growth benchmark as market leadership continued to broaden.

Performance

Allocation to the real estate and utilities sectors also contributed to performance.

Suncor Energy Inc., Restaurant Brands International Inc. and Johnson & Johnson contributed to the Fund’s performance.

An underweight allocation to the materials sector detracted from performance. Stock selection in the financials sector also detracted, as did an underweight allocation to the energy sector.

CCL Industries Inc., Boyd Group Services Inc. and Intact Financial Corp. detracted from the Fund’s performance.

Portfolio activity

The sub-advisor increased Suncor Energy Inc., Royal Bank of Canada, Alphabet Inc. and Williams Companies, Inc. The sub-advisor sold Roche Holding Ltd. and reduced Constellation Software Inc. and Intact Financial.