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Operationally, quality characterizes Mackenzie’s approach to its business.
Quality in investment management
Mackenzie has always focused on providing superior long-term investment returns. A quality approach to investment management enables the company to consistently deliver those returns to investors. The management process, depth, and quality of research capability and talent of Mackenzie’s fund managers and sub-advisors all contribute to our success over time. Sixty-five percent of Mackenzie’s mutual fund assets enjoy a five-year investment performance ranking that ranks in the first and/or second quartiles of the funds’ appropriate peer group. Mackenzie has 69 funds with a Morningstar† three-, four-, or five-star rating.
Quality in distribution
The strength of Mackenzie’s distribution network comes from the quality of relationships we enjoy across multiple channels. Mackenzie investment products are distributed to investors through retail brokers, financial advisors, insurance agents, banks, and financial institutions, giving the company one of the broadest distribution platforms of any investment company in Canada. Mackenzie continues to further penetrate these channels, extending our distribution platform and building upon these important relationships within the financial advice channel.
 In 2005, Mackenzie realized gross mutual fund sales of $8.1 billion. Redemption rates on long-term funds were 14.8%, up from 13.8% in 2004. Strong sales performance is evidence of the strength and quality of Mackenzie’s distribution network.
Quality in service
Mackenzie is focused on the customer in the delivery of the highest quality service to independent advisors and their clients. Service is available where, when, and how it is needed, either via telephone, online, or in person. The company strives to be responsive to customer needs and looks to continually improve service levels and cost efficiency.
Mackenzie offers advisor training and support through its educational programs. Through strong relationships built by Mackenzie employees, advisors benefit from ongoing education in leading business management and product training programs.
The success of these efforts is evidenced in a recent TARP survey. Overall satisfaction with Mackenzie among advisors was over 83% in 2004, up significantly from 73% in 2001. The survey also found that nearly 88% of advisors are likely to recommend Mackenzie funds to their clients, and over 84% would recommend Mackenzie to other advisors. Finally, the survey revealed that 38% of advisors polled rate Mackenzie as the overall best investment management company, ahead of the nearest competitor at 25%.
Opportunity for growth
In 2005, Mackenzie focused on three key areas that represent opportunity for the company’s strategic growth.
Income Fund Sector
Asset class ownership trends continue to indicate a shift in investor preference from foreign equity funds to income funds. From 1999 to 2004, ownership of dividend income funds increased by 7% industry wide, while foreign equity fund ownership decreased 9%. Mackenzie continued to respond to this trend by again retooling the Maxxum fund family, introducing a monthly income fund and by expanding the product options in the Sentinel brand with an Income Trust Fund.
Global Fund Sector
While international and global equity have recently been out of favour with investors, the changes announced earlier in the year by the federal government to eliminate foreign content restrictions on registered retirement savings plans will cause investors and advisors to review their portfolios. Mackenzie, in looking to anticipate this trend, added to our already strong list of global and international fund offerings under the Cundill, Ivy, and Universal sub-brands, the Maxxum Global Explorer Fund.
Institutional Mandates
Mackenzie recognizes institutional and sub-advisory mandates as an important component of our overall distribution strategy, and as such, is targeting expansion into these markets. These efforts were successful in 2005 with the expansion of a strategic relationship in the United States and the addition of Mackenzie mandates on a number of large institutional platforms in Canada during the year.
Investing in communities
Mackenzie’s commitment to quality and excellence in our business also applies in our commitment to community investment. Mackenzie has a long tradition of philanthropic giving. Mackenzie’s community investment programs are focused on three areas – corporate philanthropy, employee volunteerism, and the Mackenzie Financial Charitable Foundation.
Mackenzie’s corporate giving programs include support for a wide variety of charities at the national level. In addition, our regional sales teams are afforded an opportunity to support charitable organizations locally. Across Canada, in 2005, their support of local charities totaled nearly $400,000.
Mackenzie’s reputation is also earned by the leadership of our employees, a large number of whom are active volunteers in their own communities. Mackenzie offers its employees one paid day per year to volunteer at a charity of their choice. We also offer programs to match employees’ fundraising efforts, up to $3,000 per event, per year. There are a variety of organized events to facilitate such opportunities, and these programs enjoy a high level of support and participation. Through a series of annual awards, Mackenzie recognizes employees for their volunteering and fundraising efforts. The success of these programs helps to foster a healthy and positive workplace, which in turn allows us to attract and retain talented individuals to our team.
In 1999, we established the Mackenzie Financial Charitable Foundation, a registered Canadian charity managed entirely by volunteer employees. The Foundation acts as a centralized body through which a significant portion of our charitable giving, volunteering, and fundraising programs are coordinated. Its main areas of focus are in the fields of health services and health research, social welfare, education and poverty related causes, with a particular emphasis on charities that support children and young adults. The Foundation has steadily grown in its size and reach, enjoying growing awareness with financial advisors and the Canadian investing public.
Catalysts of change
Mackenzie’s leadership is clear. By many measures, including assets under management, sales performance, advisor satisfaction, and industry recognition and awards, Mackenzie has earned the privilege of claiming a leadership position in the industry.
The company’s leadership is also measured by the quality it delivers, and by the integrity with which we conduct our business.
Leadership demands a proactive approach. As an industry leader, Mackenzie is a catalyst of change. Combined with a proven ability to capture Canadian equity and balanced fund market share, the company’s enhanced focus on income products and its continued innovation in the foreign equity category will provide an opportunity to continue to provide financial advisors and investors with investment solutions that meet their evolving needs.
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