Mackenzie Ivy International Equity
Mandate commentary
Q2 2025
Highlights
① The mandate had a positive absolute return. An overweight position in the health care sector, along with European currency hedges, were the largest detractors to relative performance.
② Equities staged a sharp V-shaped recovery after tariff reversal.
③ Investors look ahead to trade-policy clarity.
Mandate overview
Performance was positive but underperformed the benchmark. An overweight position in the health care sector, along with currency hedges in European companies, detracted from relative performance. Stock selection in the information technology, materials and consumer staples sectors positively impacted performance compared to the benchmark index, effectively offsetting areas of relative underperformance. Communication services and information technology were the top-performing sectors this quarter.
Mandate: Positive returns that underperformed the benchmark
Performance contributors
Stock selection in the information technology, materials and consumer staples sectors positively contributed to relative performance.
Stock selection in Europe contributed to relative performance.
Performance detractors
An overweight position in the health care sector, along with an underweight position in communication services, detracted from relative performance.
Currency hedges in Europe detracted from relative performance.
Total gross returns:
Total return | QTD | YTD | 1YR | 3YR | 5YR | since INC. (NOV. 14, 2016) |
MACKENZIE IVY INTERNATIONAL EQUITY | 11.02%
| 16.13%
| 21.23%
| 11.74%
| 8.10%
| 6.25%
|
Mandate repositioning
During the quarter, the mandate added positions in Legrand SA, Schneider Electric, Sika and Japan Exchange Group.
The mandate exited positions in Seven & I Holdings Co, Bandai Namco, Murata Manufacturing and Unicharm Corporation during the quarter.
The mandate added to existing positions in Coloplast, Hoya Corporation, Wolters Kluwer, Taiwan Semiconductor Manufacturing Company and InterContinental Hotels Group.
The mandate trimmed its positions in Normura Research Institute, Deutsche Boerse, Brambles Limited, RELX Plc and Pan Pacific International Holdings.
Market overview: volatility gripped global markets during "Liberation Day" fallout
The second quarter of 2025 served as a stark lesson in the market’s ability to absorb sharp, politically driven shocks. The period was dominated by the U.S. administration's chaotic trade policy, beginning with the April announcement of sweeping tariffs, which sent global equities into a tailspin. The S&P 500 Index plunged into correction territory, marking its most significant retreat since March 2020.
This initial panic sent investors fleeing to safe havens, a move clearly reflected in the 5.7% surge in gold prices this quarter. However, the administration’s subsequent and rapid reversal of the policy triggered an equally dramatic V-shaped recovery. The initial fear that gripped the market evaporated, and major equity indices charged back into positive territory
Throughout this turbulence, central banks remained on the sidelines. The U.S. Federal Reserve (the Fed) and the Bank of Canada (BoC) held rates steady, caught between the inflationary threat of tariffs and the risk of a corresponding economic slowdown.
Market outlook: solid reasons for optimism, despite ongoing uncertainty
The world is rarely free of turmoil. Over the past five years, the world economy has faced a global pandemic, multi-decade inflation highs, aggressive interest rate hikes and significant international conflicts. Yet, despite these challenges, markets have demonstrated resilience as businesses adapt, consumers adjust, and economies discover new pathways to growth.
Looking ahead, trade policy clarity and its influence on corporate earnings will be key drivers of market sentiment. Attractive equity valuations and the potential for mid-teens earnings growth provide reasons for optimism, though uncertainty around policy and geopolitical risks remains a headwind. Central banks are expected to shift toward more accommodative monetary policy, with rate cuts anticipated in some regions. This could support economic growth while stabilizing markets, particularly in fixed income.
Persistent volatility may weigh on sentiment in the near term, especially in areas more exposed to trade tensions. However, as these risks moderate, the outlook should improve, with opportunities emerging in sectors poised to benefit from easing uncertainty. It’s important to remember that volatility, while challenging, can also create opportunities.
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