Manulife North American Dividend Income
Mandate commentary
Q4 2025
Highlights
① Being underweight to the materials sector and security selection in both materials and industrials detracted from performance.
② Global growth strengthened as inflation eased, and policy turned supportive.
③ Equities and quality fixed income remain positioned for growth.
Mandate overview
During Q4 2025, the fund modestly trailed the benchmark. An underweight in gold and precious metals was a headwind, as the group outperformed, and several holdings that had led earlier in the year retraced across materials, industrials and information technology.
We maintained our disciplined focus on business‑risk diversification, balance sheet strength and prudent position sizing. This approach continues to deliver a lower‑beta, lower‑volatility profile versus the benchmark, though it can lag during brief, factor‑driven rallies. We believe the fund is positioned to compound capital through cycles while protecting against adverse shocks.
Mandate: underperformed the benchmark over Q4
Performance contributors
Alphabet: Alphabet benefited from strong advertising trends across Search and YouTube, alongside improving momentum in Google Cloud, as AI-related demand remained robust, supporting a favourable re‑rating in the stock.
Agnico Eagle: TD was a top contributor as shares firmed into year-end on solid underlying results and continued shareholder-friendly capital actions, including a dividend increase and buybacks.
Performance detractors
Constellation Software: Constellation lagged as investors digested a founder-led leadership transition, which weighed on sentiment despite continued fundamental progress.
Uber Technologies: Uber also underperformed as the market looked through strong top-line trends and instead focused on a more cautious profitability outlook and heightened autonomous-vehicle competitive headlines, pressuring the shares through the quarter.
Total gross returns:
Total return | QTD | YTD | 1YR | 3YR | 5YR | SINCE INC. (FEB. 18 2025) |
MANULIFE NORTH AMERICAN DIVIDEND INCOME | 0.31%
| 5.67%
|
Mandate repositioning
The portfolio management team has not changed its positioning this quarter. They believe that the portfolios are well-positioned to deliver absolute returns and provide uncorrelated business risk diversification.
Market overview: global growth strengthened, inflation eased, policy supportive
Markets ended the fourth quarter of 2025 on a strong note, capping a year defined by resilience and broad-based gains. Equities led performance, as investors looked beyond policy noise and focused on improving fundamentals. Global markets advanced, supported by steady corporate earnings, easing inflation pressures and a clear shift toward lower interest rates. Canada outperformed most developed peers, driven by strength in materials and financials, while European and Asian markets rebounded on firmer trade activity and renewed investor confidence. In the U.S., equity performance remained positive, led by technology and communication services, with improving breadth across sectors signalling a healthier market foundation.
Fixed income delivered modest but positive returns, as central banks continued to ease policy. Government yields declined on the short end while longer maturities remained stable, allowing coupon income to drive returns. Credit conditions stayed firm, underscoring the strength of corporate balance sheets entering 2026.
Market outlook: equities and quality fixed income positioned for growth
Entering 2026, global markets are positioned on a solid footing. Easing monetary policy and supportive fiscal conditions are expected to sustain growth across major economies. In the U.S., healthy earnings and productivity gains continue to anchor performance. Canada benefits from resource strength and steady financials, while Europe and Asia offer improving valuation opportunities through accelerating trade and industrial expansion. Fixed income markets provide renewed income potential as yields stabilize, and credit quality remains robust.
Overall, conditions favour a balanced, diversified approach.
To discuss your investment strategy, speak to your IG Advisor.
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