Q1 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The global economy navigated a turbulent first quarter. Markets began 2026 on a positive note, with investor sentiment buoyed by continued disinflation, stable corporate earnings and expectations for further monetary easing. The outlook shifted dramatically in late February after the conflict in the Middle East escalated, and the Strait of Hormuz was effectively closed in early March, disrupting a significant share of global oil supply and raising fears of an energy-driven inflation shock.

Major central banks responded with caution. The U.S. Federal Reserve Board and the Bank of Canada both held rates unchanged at their January and March meetings. The European Central Bank postponed planned interest rate reductions and raised its inflation forecast after energy prices surged. These developments signaled that monetary easing cycles could be delayed or disrupted by the geopolitical shock.

Global equity markets declined in the first quarter, with the MSCI World Index falling about 3.5%. The U.S. market weighed most heavily on results as large-cap technology stocks retreated amid rising inflation concerns. Japanese equities benefited from ongoing corporate governance reforms. Emerging markets ended the quarter roughly flat, as higher import costs in oil-importing economies in Asia partly offset gains in commodity-exporting markets.

Performance

At the sector level, security selection in the industrials, communication services and utilities sectors contributed to performance during the quarter. Stock selection in Sweden, the U.S. and New Zealand also contributed.

Millicom International Cellular SA, ATCO Ltd. and Plains GP Holdings, LP contributed to the Fund’s performance. Millicom, a Luxembourg-based telecommunications operator, benefited from improving operating performance and favourable market sentiment across its core markets. ATCO, a Canada-based utilities and infrastructure company, benefited from stable regulated earnings and infrastructure demand. Plains GP Holdings, a U.S.-based energy infrastructure and pipeline operator, also contributed as improving energy fundamentals and midstream volumes supported the share price.

At the sector level, allocation to the health care sector detracted from performance.

Brookfield Infrastructure Corp. and Comcast Corp. detracted from the Fund’s performance. An underweight allocation to The Williams Companies Inc. also detracted. Brookfield Infrastructure, a global owner and operator of essential infrastructure assets, faced pressure from higher interest-rate expectations. Comcast, a U.S.-based media and telecommunications company, faced concerns around competitive dynamics in its broadband business. The Williams Companies, a U.S.-based energy infrastructure and natural gas pipeline operator, advanced during the quarter because of resilient natural gas demand and stable midstream fundamentals.

Portfolio activity

The Fund’s portfolio activity during the quarter was driven by the sub-advisor’s disciplined quantitative process.