Mackenzie Canadian Dividend Equity
① Returns were positive for the mandate. An underweight exposure to the information technology sector led to slight underperformance against the benchmark.
② The fourth quarter sent stocks and bonds prices higher.
③ The earnings outlook is improving, as forward-looking indicators turn positive.
The mandate performed positively over the period and slightly underperformed its benchmark. The broader Canadian market was generally strong in the quarter.
Positive stock selection in the energy, materials and consumer staples sectors contributed positively to returns relative to the benchmark.
This was largely offset due to an underweight position in the information technology sector.
Mandate: Positive returns slightly underperforming the benchmark.
Positive stock selection in the energy sector contributed positively to relative performance over the period.
An underweight allocation and positive stock selection in the materials sector was also a positive contributor to relative performance over the period.
An underweight allocation in the information technology sector was the largest detractor to relative performance over the period.
Negative stock selection in the financials sector also detracted from relative performance over the period.
Total gross returns:
since INC. (NOV. 14, 2016)
MACKENZIE CANADIAN DIVIDEND EQUITY
The fund added to existing positions in Northland Power, Emera Inc., and Choice Properties REIT.
The fund trimmed its positions in ARC Resources, Manulife Financial Inc., and Brookfield Corporation.
Market Overview: The last quarter of 2023 set a positive tone for the new year.
The fourth quarter saw a rally in most asset classes and sectors. Yields went down, sending both stocks and bonds higher. The markets aggressively priced in an economic “soft-landing”, which impacted valuations across the board. U.S. stocks began the quarter with a forward price-to-earnings (P/E) ratio in the mid-17s, but ended close to 20, a significant increase.
Bond yields went up a lot during the year, yet the fourth quarter's rally sent the US 10-year Treasury yield down to 3.87% (the exact same level at which it ended in 2022).
Canadian equities finished the year strongly, with the S&P/TSX Composite Index increasing by 7.25% (and ending the year up 8.12%). Information technology led the rally, with returns of 23.9% for the quarter, while energy was the only sector to decline.
Market Outlook: Economic indicators point towards U.S. recovery.
Central banks in Canada, Europe and the U.S. are expected to lower interest rates at some point in 2024. Signs show the manufacturing and earnings slump is fading, and the era of high inflation and interest rates is coming to an end. There are more indicators pointing to a U.S. recovery rather than a recession.
The earnings outlook is now brighter, as previous economic soft spots recede, and forward-looking indicators turn positive. Valuations shifted in the fourth quarter of 2023 to reflect this improved outlook. This means that some early-year volatility is possible, as the markets digest the latest macro-economic data and determine if their optimism was warranted or exaggerated.
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Azure Managed Investments™ provides discretionary investment management services distributed by Investors Group Securities Inc. (“IGSI”). IGSI will manage your Azure Managed Investments Accounts on a segregated basis in accordance with your investment policy statement and the resulting mandate selected by you. Mandates will be managed by Mackenzie Financial Corporation. You are required to make a minimum initial investment of $150,000; please read the Azure Managed Investment Account Agreement for complete details, including fees and expenses.
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