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. Inflation picked up in both countries 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 steady at 2.25% at its April and June meetings, while the U.S. Federal Reserve Board held the federal funds rate steady at a target range of 3.50%–3.75% and signaled that rate increases were possible later in the year.

Small- and mid-capitalization equities rose in both markets. In Canada, smaller companies benefited from the broad equity advance and from strength in energy early in the quarter. In the U.S., smaller companies gained but trailed the large-cap market, where semiconductor and artificial intelligence-related names led. Energy and materials contributed in both markets, while consumer and domestically focused names were more mixed.

Performance

Stock selection in industrials, materials and consumer staples contributed to performance. Overweight exposure to industrials and underweight exposure to materials also contributed.

Overweight exposure to Hammond Power Solutions Inc., Badger Infrastructure Solutions Ltd. and MDA Space Ltd. contributed to performance. Hammond Power’s shares benefited from demand for transformers and power quality equipment, supported by growth tied to electrification and data centre infrastructure. Badger Infrastructure reported solid revenue and earnings growth, supported by higher fleet use and demand across infrastructure end markets. MDA Space benefited from higher activity across its space systems businesses and investor confidence in its backlog and growth pipeline.

Stock selection in information technology, financials and real estate detracted from performance.

Lack of exposure to BlackBerry Ltd. detracted from performance as the shares rose sharply on better-than-expected results and a better outlook. Exposure to Artemis Gold Inc. and Groupe Dynamite Inc. detracted from performance. Groupe Dynamite’s stock was pressured by a reset in investor expectations after strong prior performance.

Portfolio activity

The sub-advisor added Bird Construction Inc. and Aecon Group Inc., reflecting exposure to Canadian infrastructure and construction demand. Descartes Systems Group Inc. and SSR Mining Inc. were added for their exposure to logistics software and precious metals, respectively.

Arizona Sonoran Copper Co. Inc., Kinaxis Inc., Groupe Dynamite Inc., Zedcor Inc., Discovery Mining Ltd. and Skeena Resources Ltd. were increased. The increases reflected copper and precious metals exposure, supply chain software growth, consumer growth and security- or infrastructure-related opportunities.

Boyd Group Services Inc., Hologic Inc. and other select health care, information technology and industrials holdings were sold. The capital went toward other investments.

Hammond Power, Badger Infrastructure, MDA Space and 5N Plus Inc. were reduced following strong share price performance. The sub-advisor reduced Keysight Technologies Inc., Cirrus Logic Inc., Vontier Corp., BRP Inc., Trisura Group Ltd., Tamarack Valley Energy Ltd., OceanaGold Corp. and CES Energy Solutions Corp. These were reduced as part of portfolio rebalancing and capital reallocation.