IG Mackenzie U.S. Dollar Fund – Global Equity Balanced Series F

Portfolio Commentary<br> Q4 2023


① Equities and fixed income both posted positive returns for the quarter. Government bonds, corporate bonds and financials were the top contributing sectors to fund performance. 

② The fourth quarter sent stocks and bonds prices higher.

③ The earnings outlook is improving, as forward-looking indicators turn positive.

Portfolio Overview

Global equities and bonds rallied in the period as investors began anticipating earlier-than-expected central bank rate cuts and positive market sentiment was renewed. Although the fund was also up for the quarter, it underperformed its benchmark. The fund’s fixed income positions contributed to relative performance while equity positions dragged. The top contributors were government bonds and the materials sector. Conversely, the information technology and financials sectors were the biggest detractors to relative performance. 

Foreign equity (49%), fixed income (33%) and Canadian equity (19%) make up the bulk of this fund.

Portfolio: The fund was up as global markets rallied, but underperformed its benchmark.  

Performance contributors

+ Duration management within government bond positions contributed the most to relative performance.

+ Security selection in the materials sector contributed to performance as the fund had better returns in the sector than its benchmark.

+ Security selection in the industrials sector also contributed to relative performance in the quarter.

Performance detractors

- An underweight position and security selection in the information technology sector detracted from performance.  

- Security selection in the financials sector also detracted from performance.  

- A slight overweight position and security selection in the consumer staples sector also detracted from performance.

Portfolio Returns: Q4 2023

Total Return 1M 3M YTD 1YR 3YR 5YR 10YR Since Inc. (April 19, 2022)

IG Mackenzie U.S. Dollar Fund – Global Equity Balanced F







<strong>Market Overview</strong>: The last quarter of 2023 set a positive tone for the new year.

The fourth quarter saw a rally in most asset classes and sectors. Yields went down, sending both stocks and bonds higher. The markets aggressively priced in an economic “soft-landing”, which impacted valuations across the board. U.S. stocks began the quarter with a forward price-to-earnings (P/E) ratio in the mid-17s, but ended close to 20, a significant increase.

Bond yields went up a lot during the year, yet the fourth quarter's rally sent the US 10-year Treasury yield down to 3.87% (the exact same level at which it ended in 2022).

Canadian equities finished the year strongly, with the  S&P/TSX Composite Index increasing by 7.25% (and ending the year up 8.12%). Information technology led the rally, with returns of 23.9% for the quarter, while energy was the only sector to decline.  

<strong>Market Outlook</strong>: Economic indicators point towards U.S. recovery.

Central banks in Canada, Europe and the U.S. are expected to lower interest rates at some point in 2024. Signs show the manufacturing and earnings slump is fading, and the era of high inflation and interest rates is coming to an end. There are more indicators pointing to a U.S. recovery rather than a recession.

The earnings outlook is now brighter, as previous economic soft spots recede, and forward-looking indicators turn positive. Valuations shifted in the fourth quarter of 2023 to reflect this improved outlook. This means that some early-year volatility is possible, as the markets digest the latest macro-economic data and determine if their optimism was warranted or exaggerated.  

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