Mackenzie Diversified Alternatives Fund | Mackenzie Investments

Mackenzie Diversified Alternatives Fund

An alternative solution for enhancing risk-adjusted returns

The Mackenzie Diversified Alternatives Fund is a one-stop solution to providing liquid assets to alternative asset classes to complement a traditional balanced portfolio.

The Fund has delivered on its objective to provide enhanced returns with substantially lower volatility than a balanced portfolio of stocks and bonds.

Matthew Cardillo

The Product

Portfolio Manager Matt Cardillo discusses the origin of the Fund idea, how it works, and how it has delivered on its objectives.

Using Alternatives to enhance return and reduce risk

Mackenzie Diversified Alternatives Fund has shown it may enhance the return and lower the risk of traditional global balanced portfolio.

The chart below shows how the risk-return profile of a traditional global balanced portfolio may be improved by adding a 20% allocation to a liquid alternative solution (MDAF).

60/40 Traditional Balanced Portfolio

Scattergraph Click to enlarge

Source: Mackenzie Investments, December 31, 2017

Global Balanced Portfolio is comprised of 60% MSCI World + 40% BofAML Global Broad Market (Hedged to CAD)
Liquid alternatives are defined as asset classes such as real estate, infrastructure, currencies, derivatives, and non-traditional equity and debt securities that can be accessed through publicly available markets and as permitted by NI81-102.

The Sharpe Ratio measures risk-adjusted returns. Generally, a higher Sharpe ratio reflects a more attractive risk-adjusted return for an investment.

Since its inception, the Mackenzie Diversified Alternatives Fund produced a Sharpe Ratio of 1.51, compared to a ratio of 0.61 for the typical Global Balanced portfolio.

Sharpe Ratio

Bar graph Click to enlarge

Source: Mackenzie Investments, from October 27, 2015 - December 31, 2017

*Reference Portfolio is comprised of 60% MSCI World + 40% BofAML Global Broad Market (Hedged to CAD)

The benefit of a diversified approach to Alternative Assets

Alternative asset classes can vary greatly in performance from year to year, making it difficult to predict which asset classes will be the best performer.

The table illustrates how from 2008 to 2017, a diversified approach may be the best way to navigate these asset classes. Since its launch, Mackenzie Diversified Alternative Fund has provided diversification, which can give investors peace of mind.

Graph Click to enlarge

Source: Mackenzie Investments
Returns are series F, as of December 31, 2017. Live data not available for MDAF prior to 2016.
Data representing Diversified Alternative Solution prior to 2016 is comprised of equal weightings of the alternative asset classes listed.

Mackenzie Diversified Alternatives Fund provides investors with a diversified portfolio of alternative asset classes, and benefits from portfolio manager oversight.

Asset Allocation: Fund's Initial Asset weights

graph Click to enlarge

Source: Mackenzie Investments, as of December 31, 2017.

For more information, please contact your advisor.

The Landscape

Mackenzie's Chief Investment Officer, Tony Elavia, discusses the benefits of the Alternative Asset class and how it has been successfully used by Institutional investors.

The Implementation

Learn how the Mackenzie Diversified Alternatives Fund works within your portfolio from Damon Murchison, SVP Retail Distribution.

Additional Resources

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 November 30, 2016 including changes in unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution, or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund.