Download performance summary contributors to performance detractors from

 PERFORMANCE SUMMARY
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For Q1 2012, Mackenzie Canadian Balanced All Cap Value1 returned 5.7%. This compares with
the blended index2 return of 2.6%
The relative outperformance was driven primarily by the equity portion of the mandate
benefitting from strong returns from the energy, materials, and consumer discretionary sectors
The mandate also benefitted from its asset mix which over-weighted equities compared to the
blended benchmark
CONTRIBUTORS TO PERFORMANCE
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The largest contributor to performance was the individual stock performance within the energy
sector
Other contributors were strong stock performance in the materials sector and both an
overweight position and good stock performance in the consumer discretionary sector
The biggest single contributor to the mandate was the holding in Flint Energy. In the quarter Flint
was the target of a takeover offer at a significant premium to its trading price. Additionally,
holdings in auto suppliers Linamar and Magna were strong performers as the outlook for auto
production improved
DETRACTORS FROM PERFORMANCE
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The biggest detractors from portfolio return were the mandate’s precious metals holdings.
Within the group, Iamgold had the largest negative impact
The consumer discretionary sector was also a negative contributor to the mandate, as investors
looked more favourably on economically sensitive companies. Loblaw’s was the largest
negative contributor to the mandate in this sector. As well, within that sector there was
takeover speculation pushing up the price of Viterra which was not held in the mandate
PORTFOLIO ACTIVITY
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The portfolio managers added to the mandate’s positions in:
o
Bank of Nova Scotia (BNS) is Canada’s third largest bank and has a unique
international strategy. In the quarter the company’s valuation declined relative to
the other banks and provided a good buying opportunity
o
SNC-Lavalin Group was added despite short-term issues regarding payments to
contractors, the portfolio managers believe the company has a strong asset base
and significant value will be realized over time
The portfolio managers added to the mandate’s positions in:
o
Potash Corp as it had lagged other fertilizer producers and represented good value
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The portfolio managers sold or reduced the mandate’s position in:
o
Thomson Reuters - even though the company has appointed a new CEO and
embarked on another corporate restructuring, after numerous years of poor
execution in its markets division, the portfolio managers believe the restructuring will
be a long, difficult process and sees better risk reward opportunities elsewhere in the
market
o
CP Rail – the portfolio managers felt it was prudent to reduce the position in CP rail as
the stock climbed ever higher due to activist shareholder Pershing Squares Capital
Management’s involvement with the company
o
Within the fixed income portion of the portfolio the portfolio managers reduced long
provincial positions as spreads narrowed and have been selectively adding to BBB
corporate holdings in the 5-10 year range, which offer very attractive spreads over
Canadian government bonds
OUTLOOK
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The first quarter of 2012 reflected a further reduction in the uncertainty that consumed the
market in the second half of 2011. Investors appear to be somewhat more optimistic about the
prospects for world growth following increased cooperation in Europe and generally positive
economic news from the US
Global economic conditions have improved but remain vulnerable. China, which has been
the key driver of much of global growth in the last five years, appears to be slowing
economically. Consequently global interest rates remain at historically low levels and are not
expected to rise in the near term
Though the year-over-year Consumer Price Index (CPI) increased slightly in the first quarter, the
portfolio managers do not see inflation as being problematic as there is very little ability to pass
through higher commodity prices to consumers. Corporate bonds generally offer investors a
significant yield increment over government bonds in this low yield environment. The portfolio
managers believe that, over time, this should translate into additional return in the fixed income
portion of the mandate as the carrying yield advantage is realized
Yield on the Canadian stock market is above even the 30-year Canadian government bond.
The portfolio managers see this as relatively positive for equities and are maintaining their
strategy of a 70% equity/30% fixed income asset mix
PORTFOLIO MANAGEMENT TEAM:
EQUITY
Hovig Moushian, MBA, CFA Portfolio Manager; Industry experience: 15 years; Firm experience: 10 years
Gordon Winter, MBA, CFA Portfolio Manager; Industry experience: 18 years; Firm experience: 6 years
Alan Pasnik, CA Portfolio Manager; Industry experience: 17 years; Firm experience: 8 years
William Aldridge, MBA, CFA Portfolio Manager; Industry experience: 16 years; Firm experience: 6 years
Michael Morden, MBA, CFA Associate Portfolio Manager; Industry experience: 18 years; Firm experience:
6 years
Wincy Wong Associate Portfolio Manager; Industry experience: 14 years; Firm experience: 6 years
Adelaide Kim, CFA Senior Investment Analyst; Industry experience: 11 years; Firm experience: <1 year
2 | Q 1 - 2 0 1 2 FIXED INCOME
Steve Locke, MBA, CFA Portfolio Manager; Industry experience: 17 years; Firm experience: 8 years
Felix Wong, MBA, CFA Associate Portfolio Manager; Industry experience: 23 years; Firm experience: 12
years
Mandate and Benchmark Performance as at:
March 31, 2012
1 Mackenzie
2 Blended
Canadian Balanced All Cap Value
Index (comprised of 60% TSX Composite TR
Index + 40% DEX Universe Bond TR Index)
1
year
2
years
3
years
4
years
5
years
10
years
-4.5%
5.2%
16.0%
4.2%
3.5%
7.4%
-2.1%
5.7%
12.3%
3.6%
3.8%
7.3%
The performance of the Mackenzie Canadian Balanced All Cap Value mandate is represented by the
gross returns of the Series A units of Mackenzie Saxon Balanced Fund for the period. The performance of
the blended index reflects the gross returns of the index for the period indicated.
© Mackenzie Financial Corporation 2012. All rights reserved.
“Mackenzie Institutional” is a trademark of Mackenzie Financial Corporation (“Mackenzie”) and is used
to identify Mackenzie’s institutional investment management and institutional client relationship
activities. The contents of this document do not constitute specific advice regarding your investment
situation or provide specific advice about investment, insurance, financial, legal, accounting, tax or
similar matters. Certain information contained in this document is obtained from third parties. Mackenzie
believes such information to be accurate and reliable as at the date hereof, however, we cannot
guarantee that it is accurate or complete or current at all times. No portion of this communication may
be reproduced or distributed to anyone without the express permission of Mackenzie.
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