While Mackenzie Bluewater Canadian Growth Fund enters a new phase with the retirement of Dina DeGeer, longtime co-lead David Arpin and DeGeer’s successor Shah Khan ensure the strategy remains in good hands.
Longtime manager DeGeer retired in September 2024. DeGeer will be a loss, but her succession was well-planned. Arpin and Khan now lead the four-person Bluewater team, a boutique of Mackenzie. Khan covers Canadian equity and will succeed DeGeer as head of this sleeve upon her retirement. Khan spent nearly 15 years learning under DeGeer, and in recent years has taken more of a lead in the investment analysis of Canadian companies. With research responsibility split by geography, Arpin, a manager since 2012, leads global equity.
The Morningstar Medalist Rating remains at Bronze for Bluewater Canadian Growth.
Mackenzie Bluewater Canadian Growth Fund
A primarily bottom-up approach is complemented by a prudent top-down awareness. The team starts by narrowing its investable universe into a manageable shortlist of companies expected to generate and grow free cash flow at an above-average market rate. Further qualitative analysis looks for strong management teams and sustainable competitive advantages. The team monitors global trends and the subsequent impacts on industries to keep it informed of secular changes. For example, an assessment on the move to electric vehicles led to the removal of the portfolio’s energy exposure by the end of 2019, which remains absent as of June 2024.
The portfolio carries notable traits. Position weights will typically range from 2%-5%, and the aggregate portfolio exhibits more growth characteristics than Canadian Focused Equity category peers. Turnover can also appear elevated at times, with the portfolio turnover ratio reaching over 90% in both 2020 and 2021, but the average holding period in the portfolio at June 2024 was 2.5 years.
Since Arpin joined in December 2012, the fund has experienced strong results. Through August 2024, Mackenzie Bluewater Canadian Growth F had a 13.0% annualized return, which beat the category average by 4.2 percentage points. This also ranks in the top decile of its category. The fund has typically held up in downturns, though sometimes lagged in market rallies. A lack of energy exposure and mega-cap technology has detracted from results more recently. However, this falls in line with the team’s style.
The strategy is also available as the NBI Canadian Equity Growth Fund.
