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.

Performance

Stock selection in the consumer discretionary and communication services sectors contributed to performance. Exposure to consumer discretionary and utilities also contributed.

Exposure to Akamai Technologies Inc. contributed to the Fund’s performance. It reported growth in cloud infrastructure and security and announced a seven-year cloud services commitment from a leading frontier-model provider. The agreement reinforced the company’s role in AI infrastructure.

Selection in the information technology, industrials and health care sectors detracted from performance.

The Fund’s underweight exposure to Sandisk Corp. detracted from performance as the stock rose. It reported AI-driven data centre demand, stronger memory pricing and record fiscal third-quarter results.

Portfolio activity

The majority of Fund activity was related to portfolio rebalancing amid a shift in sub-advisor in May. Following this transition, the trades reflected the sub-advisor’s process of daily stock selection and portfolio construction.