Key Morningstar Metrics for Mackenzie Strategic Income Fund
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Mackenzie Strategic Income pursues income through a combination of dividend-focused equities, high-yield credit, and an alternative-yield sleeve to give it more income levers than a typical balanced fund. Its risk-adjusted returns have outpaced Canadian neutral balanced Morningstar Category peers since December 2013, but that record predates 2025 changes that raised the equity target and introduced a flexible alternative sleeve.
Several teams supporting this strategy have undergone personnel or structural changes following broader firmwide changes announced in May 2026, which tempers our confidence despite stable senior leadership across the main sleeves. The fixed-income team is restructuring to separate idea generation from portfolio implementation, a change intended to free portfolio managers to focus more on investment decisions. The Canadian dividend team led by Tim Johal has also been combined with another Canadian equity team, resulting in several staff moves. The restructuring may create efficiencies by allowing team members to specialize and reduce duplicated coverage but introduces near-term uncertainty as the team adjusts to new workflows and prioritizes coverage across multiple portfolio managers.
Experienced managers continue to run this strategy across four sleeves: Johal for Canadian dividend stocks; Darren McKiernan on global equity; Konstantin Boehmer and Daniel Cooper run fixed income; and Nelson Arruda handles alternatives.
Beyond the staffing changes, the strategy’s risk profile has become more aggressive in recent years. The addition of an alternatives sleeve in early 2025 introduced an allocation with an ambitious income objective, while the portfolio’s target equity allocation has increased from 50% to 58% since 2023, nearing the Canadian neutral balanced category’s 60% limit.
The strategy’s equity and fixed-income sleeves have distinct characteristics. The Canadian and global equity sleeves employ dividend and quality-focused approaches, emphasizing risk-adjusted returns. The fixed-income sleeve has consistently favored BBB and high-yield-rated credit over government debt.
Over the year through June 2026, the F class’ 15.9% gain outperformed the peer average by 1 percentage point, placing in the category’s second quartile. The strategy’s credit tilts have generally been supported by the economic environment but have led to episodic underperformance in years like 2014 when credit risk fared poorly.
Mackenzie Strategic Income Fund: Performance Highlights
The strategy has a strong long-term performance record, although recent changes mean that performance isn’t fully representative.
From December 2013, when the Canadian dividend and global equity sleeves began splitting assets, through June 2026, the F class outperformed its Canadian neutral balanced category average by 1.2 percentage points annualized. It has kept pace with its Morningstar Canada Neutral Target Allocation Index over the same period. Risk-adjusted results (using the Sharpe ratio) were better than the peer average and matched the category index over the same period. Over the past decade, the strategy ranked in the top decile of its peer group through June 2026. That historical edge—both absolute and risk-adjusted—predates the recent increase to the equity weight and the addition of the alternative sleeve, either of which could alter the strategy’s future return characteristics.
Over the trailing one year, the strategy’s 15.9% gain outperformed the category average of 14.9%, placing in the second quartile. The fund’s tilt toward high-yield bonds and dividend-paying equities supports its income objective, but it also means returns can lag when credit underperforms or when broad equity markets reward higher-growth, lower-yielding stocks. In 2016, for instance, strong credit markets rewarded the strategy’s high-yield exposure, and it outperformed category peers, but in 2014, a weaker credit environment worked against the same positioning.
