Monthly commentary - Mackenzie Greenchip Team

Written by the Mackenzie Greenchip Team

Portfolio Manager Monthly Insights

Key takeaways

Environmental markets outperformed slightly while the Greenchip strategy slightly underperformed.   

While Greenchip benefitted from a rebound in the industrial markets for analog semis, as well as a rebound in copper miners and gains in Siemens Energy, Nexans, Aecon and Balfour Beatty, it wasn't enough to keep pace with more concentrated US digital tech-driven gains.

Offsetting some of Greenchip's strong performers in the month were losses in selected European utilities.

Macroeconomic recap

In a near repeat of last year's market trading following 'Liberation Day' tariff chaos, equity markets in April reversed early Iran war-driven losses from March and then some, with US stocks notching their best month in decades and closing at record highs.  While market behaviour abruptly shifted, the same can hardly be said for economic and - particularly - geopolitical developments.  Despite a tenuous ceasefire agreement early in the month and continued media leaks about possible negotiations, by the end of April the belligerents appeared no closer to terms and the Strait of Hormuz, now subject to a double-blockade from each warring party, was no closer to being open.  Strategic petroleum reserves around the world continued to be depleted, demand reduction measures continued in many Asian locations, and farmers faced increasing difficulty with cost inflation during peak spring planting season.

Equity markets, with momentum now fully reversed, were happy to dismiss the long-term consequences of an increasingly intractable crisis.  Although the direction of trading reversed from March's losses, the changes to relative performance across geographies and sectors did not.  US stocks and the US dollar continued to outperform, while performance concentration increasingly narrowed back to the favourite AI theme and anything connected to the enormous capital spending commitments associated with the build out of data centres.  With the US technology giants all reporting earnings towards the end of the month, the most recent guidance has 'hyperscaler' capital spending budgets growing from less than $200 billion before the launch of Chat GPT to an expected trillion-dollar figure in 2027.  As such, while those hyperscalers experienced healthy share price gains on their own, they were nothing compared to the near vertical ascents experienced by semiconductors (led by memory), electrical equipment, and cooling and other products and services to data centre needs.  Nvidia, GE Vernova, and Siemens Energy all notched gains greater than 20%, while memory makers Micron and SK Hynix doubled between the end of March and early May.  With all that euphoria, it might have been easy to forget there was still a war going on and to miss that management at Chat GPT's creator, OpenAI, were openly debating how the company would meet its contractual commitments with the same hyperscalers that continue to ramp up capital spending.

Current positioning and Outlook

Environmental markets outperformed slightly while the Greenchip strategy slightly underperformed.  While Greenchip benefitted from general semiconductor enthusiasm noted above (and a specific rebound in the industrial markets for analog semis); from its electrical equipment investments such as Siemens Energy and French cable maker Nexans; from continued gains in mid-sized electric and other infrastructure EPC such as Aecon and Balfour Beatty; and from a rebound in copper miners, it wasn't enough to keep pace with more concentrated US digital tech-driven gains. Offsetting some of Greenchip's strong performers in the month were losses in selected European utilities, as interest rates continued to climb, and a drop in the Euro currency with capital flows leaning towards the US and Asia.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The contents of this document (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) are not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.

This document may contain forward-looking information which reflect our or third party current expectations or forecasts of future events. Forward-looking information is inherently subject to, among other things, risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed herein. These risks, uncertainties and assumptions include, without limitation, general economic, political and market factors, interest and foreign exchange rates, the volatility of equity and capital markets, business competition, technological change, changes in government regulations, changes in tax laws, unexpected judicial or regulatory proceedings and catastrophic events. Please consider these and other factors carefully and not place undue reliance on forward-looking information. The forward-looking information contained herein is current only as of April 30, 2026. There should be no expectation that such information will in all circumstances be updated, supplemented or revised whether as a result of new information, changing circumstances, future events or otherwise.

This material is for informational and educational purposes only. It is not a recommendation of any specific investment product, strategy, or decision, and is not intended to suggest taking or refraining from any course of action. It is not intended to address the needs, circumstances, and objectives of any specific investor. Mackenzie Investments, which earns fees when clients select its products and services, is not offering impartial advice in a fiduciary capacity in providing this sales and marketing material. This information is not meant as tax or legal advice. Investors should consult a professional advisor before making investment and financial decisions and for more information on tax rules and other laws, which are complex and subject to change.

©2026 Mackenzie Investments. All rights reserved.