Mackenzie All-Equity Allocation ETF · TSX:MEQT
Mackenzie All-Equity Allocation ETF — Mackenzie Investments — Investor Presentation (April 2024)
23 slides from Mackenzie All-Equity Allocation ETF's investor presentation, Apr 1, 2024
Slide 1: Monthly macro and markets update
Monthly macro and markets update April 2024 All data and charts as of April 1, 2024.
Slide 2: Contents
Contents Markets Economic trends Macro policy Asset valuations 1. Market developments in 1. Consensus macro forecasts 1. Federal Reserve policy 1. Canadian dollar the past year 2. Economic leading indicators 2. Global fiscal positions 2. Canadian dollar, drivers 2. Market developments in 3. Employme
Slide 3: Market developments in the past year
MARKETS Market developments in the past year The equity melt-up broadened out in March Rates rose as the global economy showed signs Stock market indices of resilience U.S. Treasury yields by maturity 50% 6% US (S&P 500) Canada (TSX) Europe (Stoxx 50) 42.7% 40% 5% Japan (Nikkei 225) Emerging markets
Slide 4: Market developments in the past year (cont’d)
MARKETS Market developments in the past year (cont’d) US$ strength returned in March Gold has rallied among war and uncertainty Currencies relative to USD, change vs. one year ago Commodity prices in US$ 4% 2,300 100 $2,240 2% 95 2,200 90 0% -1.1% -1.5% 85 -2% 2,100 $84 80 -4% -4.9% 2,000 75 -6% 70
Slide 5: Consensus macro forecasts
ECONOMIC TRENDS Consensus macro forecasts Developed economies expected to slow in 2024 Inflation is expected to moderate towards 2% in 2025 Consensus GDP growth forecast Consensus CPI inflation forecast 10% 9% US Canada 8% 8% Eurozone Japan 7% 6% China 4.4% 6% 4% 1.8% 5% ECB, BoC, Fed and BoJ 2% 1.7
Slide 6: Economic leading indicators
ECONOMIC TRENDS Economic leading indicators PMIs have been bouncing Advanced countries’ momentum is positive Purchasing Managers’ Index, major economies Purchasing Manager’s Index, extended sample 70 60 58 65 Expansion 56 Level (>50 = positive momentum) 60 54 55 China US 52 52.2 50.9 50 50 49.7 Cana
Slide 7: Employment, United States
ECONOMIC TRENDS Employment, United States Unemployment is inching up, but still very low Prime-age employment is above pre-pandemic level U.S. labour market indicators U.S. labour market indicators 16% 68% 85% 14% 80.7% 80% 66% 12% 75% 64% 10% 62.5% 70% 8% 62% 65% 6% 60% 60.1% 60% 4% 3.9% Unemployme
Slide 8: Employment, United States (cont’d)
ECONOMIC TRENDS Employment, United States (cont’d) Openings have normalized in recent months Wage growth has peaked, but is still reflecting U.S. JOLTS indicators the market tightness U.S. wage indicators 8% 9% Quits rate Average hourly earnings (yoy) 7% 8% Job openings rate Atlanta Fed wage index (
Slide 9: Employment, Canada
ECONOMIC TRENDS Employment, Canada The labour market has clearly turned Employment rate for 25-54s is still above Canada labour market indicators pre-pandemic levels Canada labour market indicators 16% 70% 90% 14% 85% 68% 12% 80% 66% 10% 75% 65.3% 8% 64% 70% 6% 5.8% 65% 62% 62% 4% 60% Unemployment r
Slide 10: Housing
ECONOMIC TRENDS Housing House prices bounced in 2023 Canadian home valuations have outpaced House prices and equities, Jan. 2002 = 100 other countries House price-to-rent indices, Jan. 2000 = 100 700 Canada house prices 350 600 Canada US UK US house prices 300 500 TSX total return 250 400 200 S&P 50
Slide 11: Housing, Canada
ECONOMIC TRENDS Housing, Canada The effective cost of homeownership has more Higher rates explain surging payments for than doubled in 20 years new mortgages Affordability measure Affordability measure 200 40% Proportion of household earnings required to cover monthly mortgage 180 payment (average t
Slide 12: China
ECONOMIC TRENDS China China’s credit impulse failed to bounce Growth has rebounded, but stays below with reopening historical average China economic indicator and credit impulse Debt and real GDP, China 30% 45% 400% 16% China economic indicator (Li Keqiang index, left) China credit impulse (right) 3
Slide 13: Inflation
ECONOMIC TRENDS Inflation U.S. inflation will stick above 2% Canadian inflation will quickly fall to 2% U.S. inflation measures Canada inflation measures 10% 10% US CPI inflation (yoy) Canada CPI inflation (yoy) Canada core CPI inflation (yoy) 8% 8% US core CPI inflation (yoy) 6% 6% 4% 3.8% 4% 3.2%
Slide 14: Inflation expectations
ECONOMIC TRENDS Inflation expectations Market inflation expectations are back below 3% Forecasters expectations are still a touch high Future U.S. inflation as implied by bond markets U.S. inflation forecast, Survey of Professional Forecasters 4% 4% 5-year US breakeven inflation 5-year average CPI i
Slide 15: Federal Reserve policy
MACRO POLICY Federal Reserve policy Markets think the Fed will start cutting soon The Fed is shrinking its balance sheet, slowly but surely Policy rate expectations Fed balance sheet assets 6% 9 Mid-point of federal funds rate (FFR) U.S. Treasuries (trillions US$) 8 Market-implied FFR 5% Mortgage-ba
Slide 16: Global fiscal positions
MACRO POLICY Global fiscal positions Deficits are expected to shrink in the next few years U.S. debt load will stabilize at new, higher level General government deficits as a % of GDP, IMF forecasts General government debt-to-GDP ratios, IMF forecasts 4% 300% 2019 (+0%) 2% 250% 0% 2020 (118%) -2% 20
Slide 17: Canadian dollar
ASSET VALUATIONS Canadian dollar The CA$ has been trading in the 0.72-0.76 The CA-US “carry” is negative for the CAD range for a year CA-US yield differentials, basis points Canadian dollar exchange rate to US dollar $0.85 $150 40 CAD/USD (left) $0.83 $130 20 Oil price (WTI, right) $0.81 $110 0 $0.7
Slide 18: Canadian dollar, drivers
ASSET VALUATIONS Canadian dollar, drivers With lower commodity prices, the CA deficit The price of Canada’s exports stabilized in 2023 has returned Measures of export prices, Canada Current account balances as a % of GDP 4% 1,000 35% Canada Canada export-weighted commodity index (left) 3% 900 30% US
Slide 19: Yields and interest rates
ASSET VALUATIONS Yields and interest rates Real yields approaching 2% for the first time There had been an upward bias in yield forecasts since 2007 before last year Decomposition of US yields Historical yield forecasts 5% 9% 10-year Treasuries yield 10-year Treasuries yield 10-year breakeven inflat
Slide 20: Corporate bonds
ASSET VALUATIONS Corporate bonds Spreads are narrow considering the risks Corporate debt is down to pre-pandemic level U.S. corporate spreads, basis points U.S. corporate debt as a % of GDP 20% 60% Investment-grade option-adjusted yield spread 18% US corporate debt as a % of GDP High-yield option-ad
Slide 21: Equities, valuations
ASSET VALUATIONS Equities, valuations Dividend yields are less attractive given the U.S. equities appear more expensive than spike in real yields other markets Equity yields vs. bond yields Cyclically-adjusted earnings yield 7% 12% S&P 500 dividend yield US (S&P 500) S&P 500 dividend yield (adjusted
Slide 22: Disclaimer
Disclaimer Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns as of April 1, 2024 including changes in unit
Slide 23: Mackenzie Investments contact details
180 Queen Street West, Toronto, Ontario M5V 3K1 T 416 967-2380 F 416 922-3435
Mackenzie Investments — Investor Presentation (April 2024) on 6ix