Katherine Owen, portfolio manager at Mackenzie Investments in Toronto. Illustration by Joel KimmelThe Globe and Mail
If the past few weeks of market swings have taught investors anything, it’s the need for discipline and perspective, says money manager Katherine Owen.
“Rather than reacting to headlines, the focus should be on what’s actually changing,” says Ms. Owen, portfolio manager at Mackenzie Investments in Toronto, pointing specifically to the impact of higher energy prices on inflation, growth and earnings.
She urges investors to maintain balance in their portfolios, given how quickly markets can reverse if conditions stabilize.
“The goal is to position for resilience across multiple scenarios, not to predict short-term outcomes,” says Ms. Owen, who helps oversee about $24.7-billion in assets with the firm’s global equity and income team, including the $9-billion Mackenzie Global Dividend Fund, led by Darren McKiernan.
Her team’s approach is to stay measured during heightened volatility and make incremental adjustments.
“We continuously reassess the portfolio to identify areas with increased sensitivity to the current environment, such as positions impacted by higher energy costs, while selectively adding to areas that can benefit from volatility or stronger commodity pricing,” she says.
“Overall, this has been a rotation driven by underlying exposures and earnings sensitivity, rather than broad-based market weakness.”
Mackenzie Global Dividend Fund’s top three sectors include technology, with names such as Nvidia Corp. NVDA-Q and Taiwan Semiconductor Manufacturing Co. Ltd. TSM-N; health care, including Merck & Co. MRK-N; and financial services, including Deutsche Börse AG and CME Group Inc. CME-Q.
The fund is also overweight consumer staples relative to its benchmark, the MSCI World Index. The fund includes companies such as Coca-Cola Co. KO-N and Colgate-Palmolive Co. CL-N.
“A lot of these companies are very cash-flow generative, so it’s always been a natural hunting ground for us in this fund,” Ms. Owen says.
Her team also added to its energy exposure since the latest war in the Middle East started a few weeks ago, including stocks such as TotalEnergies SE TTE-N and Williams Companies Inc. WMB-N.
The fund’s Series F has returned 8.7 per cent over the past 12 months and has annualized returns of 16.6 per cent and 11.9 per cent over three and five years, respectively. The performance is based on total returns in Canadian dollars, net of fees, as of Feb. 28.
The Globe spoke with Ms. Owen recently about what she’s been buying and selling:
Name three stocks you own today and why.
Johnson & Johnson JNJ-N is a stock we’ve owned for about a decade and added to during the earlier part of last year. It’s one of our largest positions. J&J has been one of the fund’s best performers over the past year, through the bull market and more recent volatility.
We bought more of the company’s shares last year after it spun off its slower-growth, lower-return consumer health business [Kenvue Inc. KVUE-N became a separate company in 2023] to focus on its stronger-growth pharmaceutical and medical device businesses.
The market was skeptical of the strategy, but it’s showing accelerating earnings growth from mid-single digits to potentially high-single digits toward the end of the decade, driven by a strong pipeline of new products where it’s gaining market share.
As a result, the stock has re-rated quite meaningfully over the past year. It’s also considered a ‘dividend king,’ with 60-plus consecutive years of dividend growth.
TJX Companies Inc. TJX-N, the off-price retailer of apparel and home fashions (including Winners, Marshalls and HomeSense in Canada) is a stock we’ve owned since May, 2023.
Like some other companies we own, TJX is an example of a business that works in both good and bad economic times. In good times, it benefits from people shopping more, while in bad times, it benefits from consumers seeking more value.
The company’s secret sauce is its experienced buying team, which scours the world for excess inventory, buys it at a discount, and then sells it through its stores. For shoppers, it creates a treasure-hunting experience because you never know what you’ll come across. It’s a market-share gainer in retail.
Exxon Mobil Corp. XOM-N, the giant energy company, is a stock we’ve owned for a few years and added to recently amid the war in the Middle East.
We owned Exxon before the war because it had competitive advantages in oil: a low-cost resource base built through years of capital discipline, as well as growth from Tier 1 assets in the Permian basin in the U.S. and Guyana.
The recent war has created a higher floor for oil prices, and Exxon, being one of the major oil and gas companies, is going to benefit from high oil prices
Name a stock you recently sold.
Aena SME SA, Spain’s dominant airport operator, is a stock we bought on the Spanish exchange in early 2025 and sold at the end of last year.
We liked an airport in Spain because the country is becoming a more popular travel destination. Its airports are benefiting from higher traffic growth, and the company didn’t have many capital-intensive projects. That supported our strategy of seeking out strong companies with strong cash flow and dividend growth.
However, our thesis shifted last fall when the company announced it would spend heavily to expand its operations, leading to increased capital spending. That increased the risk for us, in terms of execution, which isn’t something we expected. It weighs on free cash-flow generation and may constrain dividend growth over the next few years. Because of the shift and higher-than-anticipated capital spending, we sold our position.
This interview has been edited and condensed.