Q1 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The global economy navigated a turbulent first quarter. Markets began 2026 on a positive note, with continued disinflation and expectations for further monetary easing supporting investor confidence. The outlook shifted dramatically in late February after the conflict in the Middle East escalated and the Strait of Hormuz was closed in early March, disrupting a significant share of global oil supply and triggering widespread concern about an energy-driven inflation shock.

Major central banks responded cautiously. The U.S. Federal Reserve Board and the Bank of Canada both held rates unchanged at their January and March meetings. The European Central Bank postponed planned rate reductions after energy prices surged, raising its inflation forecasts and reducing its growth projections.

Global fixed income markets delivered mixed results in the first quarter as rising energy prices disrupted the easing narrative that had supported bonds through 2025. Government bond yields rose in many developed markets, putting downward pressure on prices. Investment-grade corporate bonds showed greater resilience, particularly in the energy sector, while high-yield bonds were mixed as investor risk appetite declined toward quarter-end.

Global equity markets declined in the first quarter, with the MSCI World Index falling about 3.5%. The U.S. market weighed most heavily on results as large-cap technology stocks retreated amid rising inflation concerns. Japanese equities benefited from ongoing corporate governance reforms. Emerging markets ended the quarter roughly flat, as higher import costs in oil-importing economies in Asia partly offset gains in commodity-exporting markets.

Performance

Stock selection in the information technology and consumer discretionary sectors contributed to the Fund's performance during the quarter.

Taiwan Semiconductor Manufacturing Co. Ltd. contributed to the Fund's performance. Halma plc, Texas Instruments Inc. and Johnson & Johnson also contributed to performance.

An underweight allocation to the energy sector and stock selection in the industrials sector detracted from the Fund's performance.

Automatic Data Processing, Inc. detracted from the Fund's performance. Accenture plc and Sika AG also detracted from performance during the quarter.

Portfolio activity

The sub-advisor added Wells Fargo & Co., Danone SA and TKO Group Holdings Inc. during the quarter.

Agnico Eagle Mines Ltd. and Canadian Natural Resources Ltd., were increased.

Royal Bank of Canada, CGI Inc. and JPMorgan Chase & Co., were reduced.