Fund in Focus: Mackenzie Income Fund

Fund in Focus: Mackenzie Income Fund

Multi-year FundGrade A+® Award winner


The Mackenzie Income Fund holds a very conservative fixed-income balanced portfolio of some $1.3 billion in assets across all series as of the end of February. Asset mix is expected to be somewhat defensive, with fixed-income holdings likely to range between 60% and 90%. Despite its defensive stature, at the end of February fund was positioned a bit more for growth, holding roughly 27% in equities, and rest in fixed income, with a small 2% allocation to cash. The fund’s strategy has garnered three consecutive annual FundGrade A+ Awards, and has produced a consistent monthly FundGrade A grade.

The fixed-income sleeve is managed by the Mackenzie fixed-income team headed up by bond veterans Steve Locke and Felix Wong, using a “core plus” type approach that can invest in both investment-grade and high-yield issues.

At the end of February, 31% of the portfolio was invested in investment-grade corporate bonds, 24% in government bonds, with some exposure to bank loans and foreign bonds. The majority of the bond sleeve is invested in higher-quality issues.

On the equity side, the focus is on mainly on dividend-paying securities. Canadian equities are managed using a bottom-up, value-focused type of approach.

Global equities are managed by Mackenzie’s Darren McKiernan heading up a team that looks for a mix of attractively-valued companies with above-average income yields, and the potential for capital growth.

Over the past five years, the fund’s performance has trailed the index, but has outpaced the category average. As of Feb. 29, the 5-year average annual compounded rate of return was 3.1%, compared with 2.4% for the category average. For the most recent three years ending Feb. 29, the fund’s average annual compounded rate of return was 3.8%, outpacing the 3.1% category average in the period.

Volatility has not strayed far from the index and peer group averages, with a 3-year average annual standard deviation of 4.0%, although the fund has been a touch more volatile and has failed to keep pace with the index in down markets.

Costs are roughly in line with the peer group, with an MER of 1.9%. However, the fund continues to rank as one of the more attractive Canadian fixed-income balanced options available. It offers a deep management team using a disciplined and repeatable investment process that has led to consistent results.

Mackenzie Income Fund
Fund company: Mackenzie Investments
Fund type: Canadian Fixed Income Balanced
FundGrade: A (February)
FundGrade A+ Awards: 2017, 2018, 2019
Style: Active
Risk level: Low
Load status: Optional
RRSP/RRIF suitability: Good
Managers: Steve Locke since June 2010, Felix Wong since June 2010, Darren McKiernan since Dec. 2013
MER: 1.89%
Fund codes: MFC291 (Front-end load), MFC7038 (Low-load)
Minimum investment $500

Dave Paterson, CFA, is a money manager and an expert on investment fund research and due diligence on a variety of investment products.

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