Q1 2026 Fund Commentary

Commentary and opinions are provided by Mackenzie Investments.

Market commentary

The U.S. economy started 2026 on a positive note, with consumer spending and business investment providing support through January. Sentiment shifted in late February after the outbreak of the conflict in the Middle East, and equity markets reversed sharply in March as rising oil prices raised concerns about inflation and potential economic softening.

The U.S. Federal Reserve Board held the federal funds rate steady at 3.50%–3.75% at both its January and March meetings, maintaining a pause in its rate-cutting cycle as policymakers assessed the economic impact of higher energy costs alongside a still-resilient labour market. The unemployment rate ranged between 4.3% and 4.4% throughout the quarter, ending March at 4.3%, as job gains moderated and labour force participation edged lower.

The U.S. equity market declined in the first quarter, with the S&P 500 Index falling about 4.4%. Large-capitalization technology and software stocks underperformed as investors rotated away from high-multiple growth companies amid rising inflation concerns. The energy sector was a notable exception, advancing as crude oil prices surged. Smaller-capitalization equities and the equal-weight index outperformed the market-cap-weighted benchmark as market leadership broadened beyond the largest technology names.

Performance

Stock selection in the information technology sector and an underweight allocation to the consumer discretionary sector contributed to the Fund’s performance.

Keysight Technologies Inc. contributed to performance on signs of improving demand across test and measurement markets, particularly in data centre, aerospace and defence end markets. Akamai Technologies Inc. also contributed to performance as improving sentiment around edge computing and distributed cloud infrastructure supported the shares.

Stock selection in the industrials sector and an overweight allocation to the health care sector detracted from performance.

CoStar Group Inc. detracted from performance as spending on its Homes.com platform continued to weigh on sentiment despite the resilience of its core property data franchise. Gartner Inc. also detracted from performance because of concerns that artificial intelligence could pressure parts of its research franchise.

Portfolio activity

The sub-advisor added Reddit Inc. and GoDaddy Inc. The sub-advisor increased Block Inc. and Core & Main Inc.

Exact Sciences Corp. and Cognex Corp. were reduced.