Mackenzie North American Value Equity
Mandate commentary
Q3 2025
Highlights
① Positive returns for the mandate and underperforming the benchmark. Positive stock selection in the industrials sector in both Canada and the United States and positive stock selection in the health care sector in the United States contributed positively to returns. This was offset by an underweight and negative stock selection in the information technology sector.
② Balancing geopolitical uncertainty with positive economic fundamentals.
③ Broad diversification remains the best way to handle mixed market conditions.
Mandate overview
Performance was positive over the period but the mandate underperformed the benchmark. The Canadian market outperformed the U.S. market this past quarter (in local currency terms). Positive stock selection in the industrials sector in Canada contributed positively to returns relative to the benchmark. An underweight and negative stock selection in the information technology sector in Canada contributed negatively to returns. Negative stock selection in the financials sector also detracted from overall performance.
In the U.S., positive stock selection in the health care and industrials sectors contributed positively to returns relative to the benchmark. This was offset by negative stock selection in information technology and the consumer staples sector.
Mandate: Positive returns and underperforming the benchmark.
Performance contributors
Positive stock selection in the U.S. health care and industrials sectors contributed positively to relative performance.
Positive stock selection in the Canadian industrials sector also contributed very modestly to relative performance.
Performance detractors
An underweight and negative stock selection in the Canadian information technology sector was the biggest detractor from relative performance. Negative stock selection in the financials sector was also a notable detractor from relative performance.
Negative stock selection in the U.S. information technology sector was a material detractor from relative performance.
Total gross returns:
Total return | QTD | YTD | 1YR | 3YR | 5YR | SINCE INC. (NOV. 14, 2016) |
MACKENZIE NORTH AMERICAN VALUE EQUITY | 8.55%
| 10.43%
| 20.27%
| 19.19%
| 16.64%
| 10.30%
|
Mandate repositioning
The mandate added to its existing positions in Manulife Financial Corp and trimmed its positions in Sun Life Financial and Canadian Natural Resources Ltd.
Market overview: signs of optimism emerge, despite the noise during "Liberation Day" fallout
The third quarter delivered broad gains across asset classes, with market performance largely overriding a backdrop of cautious sentiment. Investors looked past persistent trade policy headlines, increasingly treating the U.S. administration's tariff policy as noise rather than a core risk. The primary catalysts for the positive performance were a subtle shift toward lower-interest-rate expectations and resilient corporate earnings.
Signals from the U.S. Federal Reserve of imminent rate cuts were followed by a quarter percentage cut in September. Government bond yields eased into the quarter's end, supporting bond prices, while corporate bonds outperformed government bonds.
Market outlook: solid reasons for optimism, despite ongoing uncertainty
Looking ahead, the normalization of inflation is a key development, providing central banks with the flexibility to begin an easing cycle over the next six to 12 months. This anticipated shift toward more accommodative monetary policy is expected to lower borrowing costs, creating a supportive foundation for economic activity.
This should help the macroeconomic environment sustain corporate strength. Earnings are projected to remain robust, building on a consistent trend of exceeding expectations. Resilient corporate profitability continues to be a primary driver of market performance.
The combination of impending rate cuts and durable earnings growth establishes a constructive outlook for equities. This environment reinforces the principle that focusing on underlying fundamentals, rather than reacting to short-term market volatility, is a prudent strategy for capturing future growth potential.
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