Mackenzie North American Value Equity
Mandate commentary
Q3 2026
Highlights
① North American equities saw narrow leadership from large-cap technology, while inflation, yields, commodities and stock selection drove returns.
② Earnings growth provided a powerful tailwind for equities.
③ Inflation, energy costs pushed long-term yields higher.
Mandate overview
The portfolio follows a valuation-driven, fundamental approach to North American equities, emphasizing business quality, durable cash generation and the price paid for each investment. We seek to balance attractive long-term opportunities with disciplined portfolio construction, assessing company-specific fundamentals rather than relying on narrow market leadership.
Mandate: the portfolio outperformed its blended Canadian and U.S. equity benchmark during the quarter.
Security selection was the primary source of relative strength, particularly among gold producers, energy holdings and selected industrial businesses. Weakness in certain consumer-oriented and interest-sensitive holdings, together with the absence of selected benchmark names, offset part of that benefit.
Performance contributors
Agnico Eagle Mines and Barrick Mining were important contributors to relative performance. Their exposure to gold production and cash generation supported results in a volatile precious-metals environment.
Agnico Eagle entered the quarter with strong operating momentum and free cash flow, while Barrick reported continued operational progress and steps to simplify its asset portfolio.
Performance detractors
Shopify was the largest relative detractor, reflecting the portfolio's absence from a benchmark constituent that performed strongly.
Gildan Activewear also detracted, as its shares weakened over the quarter.
Total gross returns:
Total return (CAD) | QTD | YTD | 1YR | 3YR | 5YR | SINCE INC. (NOV. 14, 2016) |
MACKENZIE NORTH AMERICAN VALUE EQUITY | 3.05
| 14.24
| 17.25
| 21.14
| 13.86
| 10.99
|
Mandate repositioning
During the quarter, we initiated positions in Hudbay Minerals, Cenovus Energy, AltaGas, while exiting positions including Caterpillar, Teck Resources and Linde.
We also increased select existing holdings, including Finning, Microsoft and Toronto-Dominion Bank and reduced positions in Agnico Eagle, Barrick and Canadian Natural Resources. These transactions reflect an active approach to managing portfolio exposures.
Looking ahead, we remain attentive to the risks posed by persistent inflation, higher borrowing costs and concentrated equity-market leadership. At the same time, we continue to evaluate opportunities in energy, precious metals and high-quality businesses where underlying cash flows and valuations provide a compelling long-term balance of risk and return. Trade policy uncertainty between Canada and the United States, and the potential effects of Canadian priority projects, remain important considerations for the outlook.
Market overview: earnings growth provided a powerful tailwind for equities
The third quarter showed that the current business cycle still has support, but risks have shifted. Growth held up, earnings improved and corporate investment remained firm, but higher oil prices, persistent inflation and rising long-term yields made the path forward less certain. Equities advanced as earnings provided fundamental support, even as higher rates raised the bar for further gains.
Canadian equities benefited from gains in resources and financials. Higher oil prices supported energy, while precious-metals companies were among the strongest performers. Bank earnings were supported by capital-markets activity, trading income and contained credit costs. U.S. equities also advanced, supported by strong earnings and continued technology investment. Higher yields weighed on more rate-sensitive areas.
International markets remained constructive overall, with parts of Asia benefiting from continued demand across the AI technology supply chain. Fixed income faced greater pressure as rising government bond yields outweighed coupon income, while credit remained comparatively resilient. Across markets, the central tension increasingly became earnings strength versus higher inflation and interest rates.
Market outlook: inflation, energy costs pushed long-term yields higher
With the recent earnings strength, the bar for market performance is higher. U.S. valuations are at the upper end of their historical range and have come under pressure from higher bond yields. Investor sentiment points to strong earnings growth going-forward, which could support equities in the near term, but the magnitude of gains may be muted.
The U.S. Federal Reserve and Bank of Canada each face two rate decisions this year, and persistent inflation has shifted central banks toward a tighter policy stance. Long-term yields remain a pressure point for equities, while also improving the income available from bonds.
The U.S. midterms may add to market volatility, but the path forward will be shaped by the economic cycle, inflation and interest rates.
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