Mackenzie Ivy Canadian Equity provides a port in a storm

Though absolute returns are lacklustre, the fund has delivered what's expected by limiting volatility.

Shehryar Khan, CFA 6 March, 2018 | 6:00PM

When Paul Musson took over as lead manager of Mackenzie Ivy Canadian in 2009, he tweaked the fund's process by adjusting the quality threshold downward for its domestic holdings. This allowed the fund to become a more well-rounded performer and stop languishing in strong market rallies. Ultimately however, the ability to limit losses in market downturns will always be this fund's calling card, and its track record of doing so means investors should consider this fund as a core Canadian-focused holding in a portfolio.

Musson leads the Canadian equity strategy and also heads the team at Ivy, which operates independently within Mackenzie Investments. Musson is a strong leader who has been with the firm since 2000. The team went through a period of personnel turnover among the analyst ranks but has been rebuilt and has demonstrated stability since 2014. The dynamic is one that promotes independence, as analysts cover specific sectors, but are held accountable by other members of the team by a rigorous review process to ensure they are confident in the quality of the names being added to the portfolio.

When searching for stocks to own, the Ivy team targets those with strong businesses models and good management teams, emphasizing those with leading market share that can sustain their competitive advantages in a variety of market scenarios. The majority of the portfolio is in such well-known large- and giant-cap names as Brookfield Asset Management (BAM.A), Alimentation Couche-Tard (ATD.B),  Oracle (ORCL) and  Loblaw (L). These firms aren't highfliers but are stable and growing businesses with defensive qualities.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alimentation Couche-Tard Inc Class B42.88 CAD1.78
Brookfield Asset Management Inc Class A44.43 CAD3.28
Hennes & Mauritz AB ADR3.25 USD4.84
Loblaw Companies Ltd67.58 CAD0.87
Oracle Corp53.28 USD0.41

About Author

Shehryar Khan, CFA

Shehryar Khan, CFA  Shehryar Khan, CFA, is a senior investment analyst for Morningstar’s Investment Management group.

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