Mackenzie Financial Corporation (Mackenzie Investments) has launched two smart beta index Exchange Traded Funds (ETFs) designed to offer investors a more diversified portfolio to reduce portfolio biases.
Mackenzie Investments has partnered with asset manager and index provider TOBAM to utilise the firm’s investment process in the new ETFs. TOBAM's methodology is designed to protect portfolios from structural bias and unmanaged risks often found in cap-weighted indices. The new Mackenzie ETFs are designed to track the performance of select rules-based indices from the TOBAM Maximum Diversification Index Series. Each index aims to create a more diversified portfolio relative to a market capitalisation weighted benchmark across Canadian and US markets.
"Mackenzie Investments' commitment to finding innovative and unique investment solutions in the marketplace has us looking around the globe. TOBAM's team in Paris brings a unique and differentiated strategy to diversification that we are pleased to offer advisors and investors," says Jeff Carney, President and Chief Executive Officer of IGM Financial Inc.
"In today's financial environment, investors are looking for additional ways to position their portfolios to help them keep pace with constantly changing markets," says Michael Cooke, Head of Exchange Traded Funds at Mackenzie Investments. "This announcement follows the recent launch of four fixed income ETFs and highlights our commitment to the ETF space. Our maximum diversification index ETFs represent an exciting new chapter in the evolution of smart beta ETFs in Canada. For investors rethinking their core holdings, these funds aim to enhance diversification that may help achieve superior performance with lower risk over reasonable periods of time."
The two new ETFs are the Mackenzie Maximum Diversification Canada Index ETF (MKC) which seeks to replicate the performance of the TOBAM Maximum Diversification Canada Index; and the Mackenzie Maximum Diversification US Index ETF (MUS) which seeks to replicate the performance of the TOBAM Maximum Diversification USA Index.
"TOBAM's core investment philosophy is to enhance diversification in order to benefit from all the potential opportunities available in equity markets," says Yves Choueifaty, CEO of TOBAM and creator of the Maximum Diversification Index Series. "Our research indicates that the systematic returns available from equity markets are higher than using market-cap weighted benchmarks', and seem to be far more stable over time. Using a biased benchmark as a reference carries implicit bets, potentially costly, which evolve dynamically. On the contrary, TOBAM's Maximum Diversification approach is designed to reduce explicit and implicit biases in terms of sector, styles, market cap and to collect the risk premium available in the investment universe. We are very excited to be partnering with Mackenzie Investments to make our strategies available to Canadian investors."
