Mackenzie Canadian Dividend Equity
Mandate commentary
Q2 2026
Highlights
① The mandate underperformed the S&P/TSX Composite Index by 0.3 of a percentage point, despite positive materials and energy selection.
② Earnings strength helped markets absorb uncertainty.
③ Valuations and rates make selectivity more important.
Mandate overview
Canadian equities advanced during the second quarter. Market leadership shifted from the commodity-driven gains of the first quarter toward financials, supported by strong bank earnings. Health care and industrials also advanced, while materials, communication services and energy declined amid lower oil and gold prices.
Positive stock selection in materials and energy partly offset negative stock selection in consumer discretionary and information technology. Overweight positions in selected financial holdings participated in the sector’s strong rally, although weakness among commodity-linked, technology and consumer holdings constrained relative performance.
Mandate: Mackenzie Canadian Dividend Equity Stock Review
Performance contributors
Manulife Financial was the largest held contributor to relative performance, supported by double-digit core earnings-per-share growth and continued new-business momentum. The portfolio’s overweight position also benefited from the strong advance in Canadian financials during the quarter.
Teck Resources contributed to relative performance, reflecting record copper sales, strong commodity pricing and disciplined operating execution. Its performance supported positive stock selection within materials, which contributed approximately 0.24 of a percentage point to relative returns.
Performance detractors
Agnico Eagle Mines was the largest held detractor. The company’s shares were pressured as gold prices declined sharply from their March peak amid a stronger U.S. dollar, changing interest-rate expectations and profit-taking across precious-metal equities.
CGI detracted after its quarterly results fell short of market expectations. The results reinforced investor concerns regarding the company’s organic growth and the potential effects of artificial intelligence on the IT services industry.
Total gross returns:
Total return (CAD) | QTD | YTD | 1YR | 3YR | 5YR | since INC. (NOV. 14, 2016) |
MACKENZIE CANADIAN DIVIDEND EQUITY | 6.65
| 14.66
| 29.84
| 19.55
| 14.07
| 10.95
|
Mandate repositioning
During the quarter, the portfolio initiated a position in South Bow Corp. and eliminated its position in Alimentation Couche-Tard. It added to Dollarama, Canadian Pacific Kansas City and CGI, while trimming Cenovus Energy, Toromont Industries and Teck Resources. These transactions selectively reallocated capital across energy, industrials, consumer discretionary and information technology, while preserving exposure to high-quality, dividend-paying businesses.
At quarter-end, financials represented approximately 36% of the portfolio, followed by energy at 18%, materials at 16% and industrials at 12%. Relative to the benchmark, the portfolio maintained overweight allocations to industrials, energy, health care and utilities, while remaining significantly underweight information technology and modestly underweight consumer staples and real estate. Financials were broadly aligned with the benchmark.
The portfolio remains positioned with a high-conviction, income-oriented approach, emphasizing large-cap Canadian companies with strong free cash flow, sustainable dividends and resilient balance sheets.
Market overview: earnings strength helped markets absorb uncertainty
The second quarter of 2026 reinforced the resilience of financial markets. Investors faced conflict in the Middle East, commodity-price volatility, shifting interest-rate expectations and renewed inflation concerns, yet global equities continued to advance as corporate earnings and economic activity remained stronger than expected. The S&P 500 gained 14.9% in U.S.-dollar terms for the quarter, while the S&P/TSX Composite Index advanced 6.4%, supported by healthier earnings expectations and improving market breadth.
Canadian equities were led by a strong rebound in financials, as better-than-expected bank earnings, resilient credit quality and improved capital markets activity lifted sentiment. U.S. equities were supported by earnings strength rather than a simple risk-on rally, with Information Technology leading as AI infrastructure spending continued to anchor sentiment. International equities also contributed meaningfully, with emerging markets Korea and Taiwan benefitting from demand across the global technology supply chain.
Market outlook: valuations and rates make selectivity more important
Markets enter the second half of 2026 with fundamentals remaining broadly supportive, although elevated equity valuations leave less room for error. Earnings growth is likely to remain the key driver of returns, while inflation trends, central bank policy and interest-rate expectations will continue to shape market sentiment.
Across asset classes, diversification remains important. Canadian, international and emerging market equities offer exposure to distinct sources of growth, while higher yields in fixed income continue to provide a cushion against volatility. Selectivity remains key as investors balance opportunities against valuation and policy risks.
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