Q4 2025 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The global economy remained resilient in the fourth quarter despite policy uncertainty and the effects of the prolonged U.S. government shutdown. Investor sentiment improved as inflation eased across major regions and expectations grew for continued monetary and fiscal policy support into 2026. Non?U.S. markets benefited from a weaker U.S. dollar and improving valuations, while Asia and Europe saw stronger earnings momentum.

Central banks maintained or extended easing cycles. The U.S. Federal Reserve Board delivered additional rate cuts in October and December, while other major policymakers signaled that accommodative policy conditions will persist. These measures helped sustain risk appetite even as global manufacturing remained soft.

Global fixed income markets delivered modest gains in the fourth quarter as easing inflation and renewed policy support in major economies improved the backdrop for high?quality bonds. Government bonds in developed markets were supported by easing policies. Investment?grade corporate bonds outperformed government bonds in several regions as credit spreads tightened and earnings remained resilient. High?yield bonds also advanced. Credit spreads remained tight across most global markets, consistent with low default expectations and a gradually improving macroeconomic outlook.

Performance

Relative exposure to Frontera Generation Holdings LLC contributed to the Fund’s performance. The company benefited from wholesale power prices that were driven by rising electricity demand from data centres, cryptocurrency mining and industrial electrification. Exposure to Kleopatra Finco SARL (4.25%, 2026/03/01) detracted from performance. The bonds declined as the company experienced soft end-market demand, withdrawal of expected equity sponsor support and a liability management exercise.

At a sector level, exposure to the utilities sector contributed to the Fund’s performance. Security selection within industrials sector bonds detracted from performance.

Portfolio activity

Holding in a term loan issued by Celsius Holdings Inc. (2032/04/01) was added to the Fund as the company repriced an existing term loan. Holding in a term loan issued by Jane Street Group LLC (2031/12/15) was increased as the company sees growth and market share capture within its trading franchise.

The Fund’s holding in a term loan issued by Arc Falcon I Inc. (2029/09/30) was sold because of competition from Chinese players, dependence on mergers and acquisition-driven growth, and higher debt levels. A holding in CoreWeave Inc. (9%, 2031/02/01) was reduced because of the sub-advisor’s more cautious near?term outlook for the company as the company balances growth ambitions with execution discipline.