Key Highlights

  • Series R securities returned 14.8% (after fees) for the year ended March 31, 2026, outperforming the S&P 500 Index return of 14.0% in Canadian dollar terms.
  • Stock selection in health care and industrials was the primary driver of outperformance; an underweight in information technology was the main detractor.
  • The portfolio team liquidated the fund's small-capitalisation allocation and increased large-cap exposure, also raising information-technology weight over the period.
  • Net assets fell 9.8% to $1.6 billion despite positive investment performance of approximately $268.4 million, as net securityholder outflows totalled approximately $445.8 million.
  • The fund operates as a 'pool,' typically used as a building block within managed and portfolio programs offered through Mackenzie Investments.

Introduction

Mack US Equity Pool (Manager: IGM Financial, TSX: IGM) has released its Annual Management Report of Fund Performance (MRFP) on SEDAR+ for the fiscal year ended March 31, 2026. The filing sets out how the fund performed against its benchmark, what drove those results, how net assets changed over the period, and how the portfolio was repositioned in response to evolving market conditions. For investors in managed programs that use this pool as a building block, the disclosure provides an important window into a key underlying component of their portfolio.

It is important to establish at the outset that Mack US Equity Pool is a mutual fund — not an exchange-listed security. It carries no ticker symbol of its own. The fund is managed by Mackenzie Investments, a subsidiary of IGM Financial Inc., whose shares trade on the Toronto Stock Exchange under the symbol IGM. The pool structure means the fund is generally accessed through Mackenzie's managed portfolio programs rather than purchased directly by individual investors, though the underlying regulatory disclosure obligations are the same as for any other mutual fund in Canada.

For the year ended March 31, 2026, Series R of the fund returned 14.8% after fees, outperforming the S&P 500 Index's 14.0% return in Canadian dollar terms. At the same time, net assets declined 9.8% to $1.6 billion — a result of substantial net securityholder outflows that exceeded the gains from positive investment performance. This article unpacks both the return story and the asset story, sets them in market context, and outlines the risks and uncertainties that accompany any investment in a U.S. equity fund.

Fund Background: Objective and Strategy

Mack US Equity Pool aims to provide long-term capital growth by investing primarily in the equities of U.S. issuers. The portfolio may also invest in other funds managed by Mackenzie Investments, providing additional flexibility in how U.S. equity exposure is achieved. The mandate is intentionally focused: this is a pure-play U.S. equity fund, and its performance is assessed primarily against the S&P 500 Index.

The 'pool' designation is significant. Unlike a conventional retail mutual fund marketed directly to individual investors, a pool is typically a building block used within managed portfolio programs. In Mackenzie's product architecture, pools like this one are held within the underlying portfolios of managed solutions — meaning that when an investor participates in a Mackenzie managed program with U.S. equity exposure, it is often this pool (or one like it) that provides that exposure. The pool structure concentrates management focus on the underlying investment mandate without the administrative complexity of managing a large, direct retail securityholder base.

The fund employs an active management approach, with the investment team making decisions about stock selection, sector weights and market-capitalisation positioning. As the MRFP documents, the team made a deliberate and material change during the fiscal year — liquidating the fund's small-capitalisation allocation in favour of greater large-cap exposure and increasing the weight of the information technology sector. These are active decisions, and their implications for performance and risk are discussed further below.

Mackenzie Investments, which manages the fund, is one of Canada's largest active asset managers. As a wholly owned subsidiary of IGM Financial Inc. (TSX: IGM), it has the research, risk management and trading infrastructure of a large institutional manager while maintaining the flexibility to adapt its strategies to evolving market conditions.

Summary of the SEDAR+ Filing (the MRFP)

The Annual Management Report of Fund Performance filed on SEDAR+ covers the year from April 1, 2025 to March 31, 2026. As a standardised Canadian regulatory document, the MRFP provides management's discussion of investment performance, financial highlights, a summary portfolio, and historical performance data across the fund's series.

Series R is the reference series for performance reporting in this article, consistent with the primary disclosure in the MRFP. Different series carry different fee structures and are accessible through different distribution channels; investors should confirm which series applies to their specific investment before drawing comparisons. The full MRFP, available on SEDAR+ under the fund's issuer profile, provides performance and financial data for all series.

The MRFP also includes management's discussion of how markets performed during the period, how the portfolio was positioned and adjusted, and what drove the relative outperformance or underperformance versus the benchmark. This qualitative commentary is one of the most valuable elements of the filing, offering insight into the investment team's reasoning — though it is naturally written from the manager's perspective and should be read alongside independent analysis.

The Most Important Details: Performance and Net Assets

Series R of Mack US Equity Pool returned 14.8% (after fees) for the year ended March 31, 2026. The benchmark S&P 500 Index returned 14.0% over the same period, measured in Canadian dollar terms. The fund therefore outperformed its benchmark by 0.8 percentage points — a meaningful but modest margin that reflects the competitive nature of active management against a widely followed large-cap index.

The outperformance was driven primarily by stock selection in two sectors: health care and industrials. The MRFP identifies these as the key contributors to relative performance — a finding consistent with market conditions in which stocks outside the mega-cap technology cohort delivered strong returns. The fund's underweight exposure to information technology was the primary detractor from relative performance. During much of the period, AI-driven technology stocks were the strongest performers in the U.S. market, and a portfolio with less exposure to that theme would naturally lag the index on that dimension.

The net asset picture tells a different story from the return figure. Net assets fell 9.8% to approximately $1.6 billion. Positive investment performance contributed approximately $268.4 million in net income. However, this was more than offset by net securityholder activity that reduced assets by approximately $445.8 million. Put simply, more money left the fund through redemptions (net of new sales and distributions) than was added by investment gains. The drivers of these outflows are not detailed in publicly available MRFP disclosures, but the scale — nearly half a billion dollars in net outflows in a single fiscal year — is notable given the fund's overall size.

The portfolio team made a significant strategic change during the year. The fund's small-capitalisation allocation was fully liquidated in favour of greater large-cap exposure. Simultaneously, the team increased the fund's information-technology sector weight. These moves appear to reflect the team's assessment that the market environment favoured large caps and that the IT sector, despite being a prior underweight, warranted greater representation. The timing and execution of these shifts — and their impact on forward performance — will only become apparent in subsequent MRFP filings.

Why Investors May Be Watching the Fund

Mack US Equity Pool is one of Mackenzie Investments' primary vehicles for gaining active U.S. equity exposure within managed portfolio programs. Its performance therefore has implications not just for direct investors in the pool but for participants in any Mackenzie managed program that holds the pool as a building block. The fund's 14.8% return, achieved in a year marked by significant market volatility, will be examined by portfolio managers assessing whether the U.S. equity sleeve of their programs delivered appropriate results.

The net asset decline from $1.7 billion to $1.6 billion, driven by net outflows rather than performance losses, raises questions that investors and analysts may wish to explore. Are the outflows a result of clients moving assets out of U.S. equity exposure broadly? Are they linked to changes in how managed programs are constructed? Or do they reflect competitive pressures from lower-cost alternatives? The MRFP does not answer these questions directly, but they are reasonable ones to consider when evaluating the fund's trajectory.

The strategic shift away from small-cap stocks and toward large caps, with an increased IT weight, is also worth tracking. These are not trivial changes — they represent a meaningful repositioning of the portfolio's risk profile. Whether the new positioning enhances or detracts from future relative performance will depend on which factors drive U.S. equity returns going forward, which is inherently unknowable in advance.

Market Context

The year ended March 31, 2026 was eventful for U.S. equities. For much of the period, American markets delivered strong gains, propelled by robust corporate earnings, enthusiasm for artificial intelligence and the outperformance of large-cap technology stocks. The S&P 500's 14.0% return in Canadian dollar terms reflects a year that was broadly positive but not without disruption.

In early 2026, U.S. equities experienced a sharp correction. Rising borrowing costs, escalating geopolitical tensions and weakness specifically in the information technology sector combined to drive a notable market pullback. This correction interrupted what had been a sustained rally and contributed to increased volatility across equity markets. The correction also caused leadership in the U.S. market to broaden — stocks outside the mega-cap technology cohort performed better on a relative basis during the period of turbulence.

Within the S&P 500, the MRFP notes that energy, communication services and information technology were the best-performing sectors in Canadian dollar terms over the full year, while financials, health care and real estate were the weakest. This sector-level breakdown helps explain why the fund's stock selection in health care and industrials — two sectors that did not lead the index — was able to contribute to outperformance through strong individual security selection within those groups, even as the overall health care sector lagged.

The Canadian dollar's movements relative to the U.S. dollar also affect returns for Canadian investors holding U.S. equities. Currency effects can add to or subtract from underlying equity returns depending on the direction and magnitude of exchange-rate changes. The S&P 500 return figure of 14.0% cited here is already expressed in Canadian dollar terms, meaning currency effects are incorporated.

Industry Context

U.S. equity funds are among the most widely held and closely watched categories in the Canadian mutual fund industry. Canadian investors have historically allocated meaningfully to U.S. equities as part of diversified portfolios, and the performance of U.S. equity funds is a frequent topic of discussion among advisors, investors and financial media.

Active managers in the U.S. equity space face a particularly competitive benchmark: the S&P 500 is a well-documented and liquid index against which the majority of active funds have historically struggled to add consistent value after fees. In this context, Mack US Equity Pool's 0.8 percentage point outperformance in the year ended March 31, 2026 represents a positive result, though one year of outperformance is not sufficient to draw conclusions about long-term active management skill.

The rise of low-cost U.S. equity index ETFs has intensified competitive pressure on active U.S. equity managers. Canadian investors can now access S&P 500 exposure at very low cost through products offered by multiple providers. Against this backdrop, the case for an actively managed pool like Mack US Equity Pool rests on its ability to consistently add value above the index over full market cycles — a standard that the full MRFP's historical performance tables help assess, though past performance does not guarantee future results.

Pool structures like this one are a common feature of sophisticated asset management platforms, allowing large managers to centralise investment expertise and apply it efficiently across multiple portfolio programs. The pool's declining net assets reflect the ebb and flow of flows within managed programs, which may be driven by factors unrelated to the pool's own investment performance.

Potential Opportunities

For investors within managed programs that include Mack US Equity Pool as a building block, the fund's outperformance of the S&P 500 in the fiscal year ended March 31, 2026 represents positive news. Active stock selection in health care and industrials added value, and the fund delivered its mandate — long-term capital growth through U.S. equity exposure — in a year that included both a sustained rally and a sharp correction.

The portfolio repositioning — moving from small-cap to large-cap stocks and increasing the IT weight — could be viewed as positioning the fund to participate more fully in the returns driven by large-cap technology and AI-related themes that were a dominant feature of the prior period. Whether this repositioning adds value will depend on how those themes evolve, which is uncertain. If the market broadens further and small-cap stocks recover relative to large caps, the elimination of the small-cap allocation may prove a headwind. Conversely, if large-cap IT leadership continues, the repositioning could enhance relative performance.

The fund's explicit focus on U.S. issuers provides concentrated, professionally managed exposure to the world's largest and most liquid equity market. For portfolio programs seeking a reliable U.S. equity building block, the pool's scale and active management framework are potential strengths.

Key Risks and Uncertainties

Equity market risk is the primary risk for Mack US Equity Pool. As a fund invested substantially in U.S. equities, its net asset value will fluctuate with U.S. stock prices. The sharp correction in early 2026 is a reminder that equity markets can move quickly and unpredictably, and that periods of strong returns can be followed by significant drawdowns. There is no guarantee that the U.S. equity market will deliver positive returns in any given period.

Active management risk is inherent in any fund that seeks to outperform a benchmark through stock selection and sector positioning. The decisions that drove outperformance in 2026 — overweights in health care and industrials, underweight IT — could just as easily produce underperformance in a different market environment. The deliberate shift away from small caps and toward large caps is a concentrated active bet, and its outcome is uncertain.

Currency risk is relevant for Canadian investors holding U.S. dollar-denominated assets. Appreciation of the Canadian dollar relative to the U.S. dollar would reduce returns in Canadian dollar terms, while depreciation would enhance them. The MRFP should be consulted for details on whether and how the fund manages currency risk.

Flow risk — the continued withdrawal of assets from the fund through net redemptions — could affect the fund's ability to maintain its investment strategy and achieve scale efficiencies. If outflows persist, the fund's size could decrease to a level that affects its management, though there is no indication from the MRFP that this is an immediate concern. Readers are encouraged to review the full SEDAR+ filing for a complete discussion of all risk factors applicable to the fund.

What Could Affect the Fund Next

The direction of U.S. monetary policy and interest rates is a key variable for U.S. equity investors. If the Federal Reserve cuts rates, the resulting lower discount rates could support equity valuations broadly, while a sustained higher-for-longer rate environment may continue to create headwinds, particularly for growth-oriented sectors. The early 2026 correction, partly attributed to rising borrowing costs, illustrates how sensitive U.S. equities can be to interest rate developments.

The AI and technology investment cycle is another important factor. The performance of mega-cap technology stocks in recent years has been closely tied to expectations about AI-driven revenue growth and capital spending. If those expectations are revised — positively or negatively — the IT sector's weight in the S&P 500 and the fund's relative positioning will become correspondingly more or less significant. The fund's decision to increase IT exposure going into the new fiscal year means it will be more directly affected by developments in this space.

Geopolitical developments, including trade policy, tariffs and geopolitical tensions, could also affect U.S. corporate earnings and investor sentiment. The MRFP notes geopolitical tensions as a factor in the early 2026 correction, and such risks remain present. Investors should monitor these developments and assess their implications for U.S. equity exposure within a diversified portfolio.

Long-Term Outlook

Over the long term, the case for Mack US Equity Pool rests on its ability to generate risk-adjusted returns from U.S. equities that justify its active management fees relative to passive alternatives. The fund's 14.8% Series R return versus the S&P 500's 14.0% in the year ended March 31, 2026 is one data point in what should be evaluated as a multi-year track record. The MRFP's historical performance tables provide additional context, though investors should always consider performance over multiple market cycles.

The strategic shift undertaken during the fiscal year — moving away from small caps and toward large caps — will be a defining factor in how the fund performs relative to its benchmark in the near to medium term. If large-cap U.S. equities continue to lead the market, the repositioning may be vindicated. If small-cap stocks recover their historical relative-value advantage, the elimination of that allocation may prove costly. These are genuine uncertainties that active management always entails.

For investors in managed programs that include this pool, the long-term outlook for the fund is inseparable from the long-term outlook for U.S. equities broadly and for active management as a source of added value. Both of these are subjects of ongoing debate in the investment industry, and the most prudent approach is to review the fund's full MRFP disclosure, assess its costs and positioning relative to alternatives, and seek professional advice tailored to individual circumstances.

Conclusion

Mack US Equity Pool (Manager: IGM Financial, TSX: IGM) has filed its Annual MRFP on SEDAR+ for the year ended March 31, 2026, reporting a Series R return of 14.8% — a modest outperformance of the S&P 500 Index's 14.0% gain. Health care and industrials stock selection drove the outperformance; an underweight in information technology was the primary drag. The team made a material portfolio change during the year, liquidating small-cap holdings and increasing large-cap and IT exposure — a repositioning whose full effects will be visible in future filings.

Net assets declined 9.8% to $1.6 billion, reflecting net securityholder outflows of approximately $445.8 million that exceeded the fund's $268.4 million in investment gains. This divergence between investment performance and asset flows is a notable feature of the year's results and warrants monitoring by investors in Mackenzie's managed programs that hold this pool.

The full Annual Management Report of Fund Performance is available on SEDAR+ and contains detailed financial highlights, historical performance data and risk disclosures that this summary cannot fully replicate. Investors are encouraged to read the complete filing and consult a qualified financial adviser before making any decisions based on the fund's performance.