Key Morningstar Metrics for Mackenzie Canadian Strategic Fixed Income ETF
- : NeutralMorningstar Medalist Rating
- : AverageProcess Pillar
- : AveragePeople Pillar
- : AverageParent Pillar
Mackenzie Strategic Bond (including Mackenzie Canadian Strategic Fixed Income ETF MKB) receives a People rating downgrade to Average from Above Average, reflecting an ongoing transition to a new fixed-income team structure that has introduced new team members and altered roles and responsibilities.
Mackenzie’s May 2026 restructuring of its fixed-income team lowers our conviction because it changes portfolio manager roles and shifts more responsibility to a newly formed implementation group. This transition has meant a shift to a specialized model separating idea generation from implementation; portfolio managers previously handled some implementation and idea generation. The restructuring resulted in departures concentrated in implementation roles. A new portfolio engineering team will handle implementation, combining the existing team, new hires, and staff previously managing Mackenzie’s passive exchange-traded funds, who lack active fixed-income experience.
The approach aims to add value through investment-grade credit allocation and selection along with interest rate and yield-curve positioning, with some flexibility to hold emerging-markets and non-investment-grade debt. It continues to merit an Average Process rating. The strategy’s tilt toward BBB credit has typically driven outperformance versus the Canadian fixed-income category average during strong credit markets, though weaker credit markets haven’t necessarily led to underperformance. In 2023, however, the managers reduced credit risk due to recession fears, which caused the strategy to lag its peers that year. While the team remains active in its macro portfolio positioning, its management of interest rate risk has not consistently set the process apart.
Additional process changes are in process to support the new operating model. Macro and credit teams will generate and score investment views on a standardized scale, for example, which will influence position sizing for the engineering team to implement. The managers aim to measure efficiency by segment to identify issues and target improvements, but the new model may introduce execution risks if ideas are not accurately implemented.
Over the trailing year through June 2026, the strategy’s F class series delivered a 3.55% gain, outperforming the FTSE Canada Universe Bond Index’s 3.46% and its Canadian fixed-income category average of 3.38%. The strategy also bested both its peers and index on a volatility-adjusted basis (as measured by the Sharpe ratio), indicative of a favorable risk/reward trade-off.
Mackenzie Canadian Strategic Fixed Income ETF: Performance Highlights
The strategy beat the category average by 40 basis points annualized over the trailing 10 years through June 2026. However, much of that record predates the managers’ 2025 policy change, which cut the strategy’s maximum non-investment-grade bond exposure from 25% to 5%, now the category limit. So, performance from April 2025 onward is more relevant for assessing the strategy in its current form.
Over the trailing year through June 2026, the strategy’s class F series delivered a 3.55% gain, outperforming the FTSE Canada Universe Bond Index by 9 basis points and its Canadian fixed income peer average by 17 basis points. The strategy delivered better volatility-adjusted returns than its peers and the index, as measured by the Sharpe ratio. Portfolio attribution versus the FTSE Canada Universe Bond Index shows that government bond selection and an allocation to Mexican sovereign bonds were contributors to returns.
Over the decade from 2015 to 2024, the strategy consistently ranked in the first or second quartile of peers, with the exception of 2023. In 2023, the strategy lagged its typical peer by 50 basis points, landing in the bottom quartile. The managers reduced credit risk in anticipation of a recession, which detracted from returns as credit ultimately performed well. The managers’ longer-dated provincial bond holdings also detracted as interest rates continued to increase during the year.
