Monthly commentary - Mackenzie Betterworld Team

March 31, 2025

Written by the Mackenzie Betterworld Team

Market overview

In March, equity markets were impacted by concerns over a potential growth scare due to anticipated US reciprocal tariffs. Factors such as escalating tariff retaliation risks, fiscal austerity, a weakening job market, and inventory destocking contributed to these fears. The S&P 500 underperformed compared to European and Asia-Pacific equities, with tariff uncertainty weighing on stock prices and sentiment. This led to a significant correction, with the S&P 500 losing 10.1% from February 19 to March 13. Despite the rapid pullback, historically, quick corrections like this have not typically turned into bear markets. Amidst the uncertainty, gold reached new highs, reflecting a flight to safety and driving gold stocks to outperform the TSX 60.

Portfolio and Sectors review

Mackenzie Betterworld Global Equity Fund

The Mackenzie Betterworld Global Equity Fund underperformed its benchmark (MSCI World ex Fossil Fuels Index) for the month. Stock selection in health care industrials detracted to portfolio performance while stock selection in financials and information technology contributed most to portfolio performance.

European financials continued to demonstrate relative strength throughout the month, evidenced by the positive performance of portfolio holdings Unicredit and ING Groep offsetting weakness in U.S. financials.

In the information technology sector, the team moderately added value compared to their benchmark especially in the software-related companies.

Mackenzie Betterworld Canadian Equity Fund

The Mackenzie Betterworld Canadian Equity Fund underperformed its benchmark (S&P/TSX Composite Fossil Fuel Reserves Free Index) in March. The fund's stock selection in the materials and health care sectors along with an underweight to energy detracted to portfolio performance. However, stock selection in the real estate sector contributed positively to the portfolio's overall performance.

Gold continued to serve as a reliable hedge against uncertainty throughout the month amid market volatility. The Fund's exposure to gold helped offset the weakness experienced with copper. Portfolio companies like Agnico Eagle, a leading firm in the gold sector known for their strong sustainability practices, helped mitigate the relative underperformance of the fund in the materials sector.

Team Engagement

In March, the Betterworld team met with Schneider Electric a French multinational corporation that specializes in digital automation and energy management. Registered as a Societas Europaea, Schneider Electric is a Fortune Global 500 company, publicly traded on the Euronext Exchange, and is a component of the Euro Stoxx 50 stock market index. In fiscal year 2024, the company posted revenues of €38.15 billion. The non-exhaustive list of discussion topics included:

Strategic Update (from the new CEO) and a 2025 Sustainability Strategy Review:

Many encouraging opportunities ahead.
Delivering on short-term results and continuing long-term efforts.
New cycle starting in January 2026 will mix current engagements with new initiatives.
Science-Based targets remain unchanged.
An avid discussion on the Chief Sustainability Officer role description:
- Dedicated to sustainability, for the first time (previously this role had a dual Strategic + Sustainability focus)
- Focus on strategic and sustainability initiatives.
- Building the next chapter with a strong focus on sustainability.
- CSO’s scope includes defining long-term sustainability strategy, performance, and execution on current engagements.

Outlook for Datacenters and Anticipated Impact on Emissions Profile

The company highlighted India's focus, especially on datacenters.
50% of datacenter business comes from the US with the rest outside the US.

Update on Biodiversity Assessment and Plans to Set Biodiversity Targets

Management plans to provide an update on biodiversity assessment and targets in the next year.
The company wants to consider the downstream impacts of datacenters on water and land use.

Proxy Voting

The Betterworld team participated via proxy in 3 company annual shareholder meetings in March with Danish pharmaceutical firm, Novo Nordisk, Italian bank, Unicredit Spa and US media and entertainment firm, Walt Disney.

Learn more about the team

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