Portfolio returns: Q3 2026
| Total Return | 1M | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inc. July 16, 2014 |
IG Core Portfolio – Global Income F | -1.45
| -2.63
| -1.76
| -1.45
| 3.44
| 0.63
| 1.52
| 2.44
|
Quartile rankings | 2 | 2 | 2 | 2 | 3 | 2 | 2 |
IG Core Portfolio – Global Income Series F
Q3 commentary 2026
Highlights
① The portfolio declined during the quarter, primarily with rising bond yields weighing on global and Canadian fixed-income exposures.
② The Mackenzie IG Global Bond Pool was the largest detractor with rising yields weighing on returns.
③ Canadian government bonds detracted with rising yields weighing on duration-sensitive holdings, while real property and AAA CLO exposures provided positive contributions.
Portfolio Overview
Fixed-income markets declined in Q3 2026 with persistent inflation, higher energy prices and shifting monetary-policy expectations pushing government bond yields higher. In the U.S., resilient economic activity and elevated inflation prompted the U.S. Federal Reserve to raise its policy rate by 25 basis points in September to 3.75%–4%. Treasury yields increased across the curve, weighing on bond prices, particularly longer-duration securities.
Canadian fixed income also faced pressure despite the Bank of Canada maintaining its policy rate at 2.25%. Concerns around inflation, trade uncertainty and rising global yields contributed to higher Government of Canada bond yields. Longer-duration bonds experienced greater losses, while shorter-maturity securities demonstrated relatively greater resilience. Canadian investment-grade bonds declined, with government securities particularly sensitive to the rise in yields.
Credit markets generally held up better than government bonds, although performance varied across quality segments. Investment-grade corporate credit benefited from comparatively stable spreads and continued investor demand, while lower-rated credit faced greater pressure with financing costs increasing. High-yield bonds proved more resilient than longer-duration government debt over the quarter, supported by higher coupon income and lower interest-rate sensitivity. Overall, duration was a key driver of fixed-income performance, with rising yields outweighing income for many government-bond exposures.
During the third quarter, the Mackenzie – IG Canadian Bond Pool increased its government-bond exposure, particularly federal securities, while the Mackenzie North American Corporate Bond Fund increased its allocation to corporate bonds. The Mackenzie – IG Global Bond Pool maintained substantial sovereign exposure, despite a modest reduction during the quarter. Overall, positioning changes reflected differing approaches to government and corporate bond exposures across the underlying funds.
The fixed-income segment delivered a negative portfolio contribution to return for the quarter. Performance was dragged by the Mackenzie – IG Global Bond Pool, followed by Mackenzie Core Plus Global Fixed Income ETF. The Canadian credit and strategic bond allocations also contributed to the negative performance. The IG Mackenzie Real Property Fund Series and Mackenzie AAA CLO ETF were the only positive contributors to the performance.
Other core holdings, such as the Mackenzie Canadian Strategic Fixed Income ETF, Mackenzie – IG Canadian Corporate Bond Pool, Mackenzie – IG Canadian Bond Pool and Mackenzie North American Corporate Bond Fund, also detracted from the performance.
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: elevated yields favour credit and relative value over duration
So far, 2026 has been defined by the drastic rise in yields across developed markets, led by the U.S. The outlook for Q4 depends on whether the drivers of this increase remain, are tempered or reverse. We see three primary drivers: stubbornly high inflation supported by elevated energy costs, debt and deficit concerns and continued outsized corporate issuance led by hyperscalers and the AI buildout.
Of these, only a reversal in energy prices seems realistically possible. The AI buildout is a game of survival for hyperscalers, and higher yields are unlikely to be a deterrent. As such, adding duration, even at relatively elevated yield levels, remains unattractive.
Higher yields have made corporate debt attractive from an all-in yield perspective, keeping credit spreads tight despite a more fragile market. We therefore favour alternative opportunities to add carry, such as emerging-market debt and relative-value opportunities rather than outright duration. One area we are monitoring for Q4 is the rapidly widening spread between U.S. and Canadian government bonds, which increased by 30–35 basis points across the 10-year and 30-year maturities during Q3.
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