Monthly commentary - Mackenzie Greenchip Team

Macroeconomic recap

June completed the first half of 2026 with a continuation of the trends that dominated the year so far: war, geopolitical manoeuvring, and disinformation on one hand; and ever-growing AI promises, AI capex, AI-driven price inflation (especially in the electricity sector), and AI-related stock market bubbles on the other.  The stock bubble phenomenon minted four new members of the USD $1 trillion club and – at least briefly – the world’s first trillionaire in Elon Musk.  Other trends in H1 2026 were much less linear.  The ‘de-dollarization’ trend that led to global markets and currencies outperforming their US counterparts in 2025 and early 2026 reversed abruptly with the launch of the war on Iran.  While Asian markets are still the top performers for 2026 to date, early leaders in Europe and Latin America now sit near the bottom of the rankings.  And with newfound dollar strength, a building commodities boom also hit a wall: silver, up as much as 50% in January and February is now down nearly 20% for the year, with gold also in negative territory.  Oil was down 20% in June alone and is only up 20% for 2026 even as it remains the primary motive for the global wars launched by the US and as inventories have been significantly depleted by the still-far-from-resolved Iran conflict.

Current positioning and Outlook

Environmental indexes largely outperformed both in June and for the first half while Greenchip strategies also outperformed in H1 2026 but lagged in June.  Both environmental indexes and the Greenchip strategy continued to derive their strongest performance from ‘AI-adjacent’ industries such as semiconductors, passive electronics, electricity infrastructure and utilities.  For Greenchip, ST Microelectronics led both June and H1 2026 performance, basically tripling for the year-to-date.  Six of Greenchip’s top performers in June were utilities, five of which were European.  The downside for Greenchip in June was dominated by European industrials, solar, and copper miners.  With inflation in cost and components and interest rates creeping higher, any industrial not directly connected to AI faced challenging economics and diminished investor interest.  Meanwhile the global solar industry continued to grapple with supply overcapacity and demand challenged by unavailable grid connections.  Copper was a slightly different story, with the commodity coming off peak levels in June, but still far stronger than the performance of other major commodities noted in the first paragraph.  While copper trades weaker in strong-dollar markets just as other commodities, it is also AI-adjacent as it is critical for expanded global electricity systems.  With little investment response to currently elevated copper prices, it seems that prices will need to go higher still to ensure the needed copper supply for electricity-driven visions of the future. 

Given the wide dispersion in performance in the first half of the year, Greenchip’s trading activity was above average.  Although fundamentals have improved for most of our strong performers, we judge that price performance has often exceeded those fundamentals and risk/reward has therefore deteriorated.  As such, we have been active sellers in many of our strongest names.  Funds have been, and will likely continue to be, deployed in often small or mid-sized global companies involved in utilities, transport, agriculture and electrical applications, but not closely associated with AI.  Members of our team visited Europe, Brazil, and China in H1 and we are deliberating many new investment ideas that emerged from these research trips.

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