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From Boomers to Millennials: 50 Years of Canadian Investing

Mackenzie Investments opened its doors in 1967. While much has changed since then, it continues to stay ahead of the curve.

 

Date: October 6, 2017

Only in Canada could a successful financial firm owe its existence to the founder of Swiss Chalet. In 1967, Alexander Christ was about to leave a successful Bay Street career to manage his own money when Richard Mauran, a wealthy investor and the fast-food chain’s co-founder, asked him to oversee his growing investment portfolio. He agreed.

While Christ was managing Mauran’s money – out of an office above a Swiss Chalet, no less – he came across mutual fund trusts and realized they were incredibly tax-efficient structures for investments. Soon after, he created the Industrial Growth Fund – and it was then that Mackenzie Financial (now Mackenzie Investments) was born. The company has since grown into a financial giant, with $68-billion in assets under management.

“It’s wonderful to have a 50-year heritage and to be part of a leading Canadian organization that has successfully navigated diverse and challenging eras,” says Barry McInerney, who became the company’s CEO last year. “The investment industry experiences dramatic changes every decade. Our response at Mackenzie has been, and will continue to be, meeting the ever-changing needs of investors through innovation. It’s embedded in our culture,” he says.

Built on Boomers

Mackenzie built its business on the evolving needs of the massive baby boomer cohort. In the early 1970s – the company went public in 1973 – it’s clients were young families, many of whom were cautious investors. That decade, though, saw the advent of money market funds, which allowed people to invest in risk-averse assets at high interest rates. With those rates running as much as 13 percent by the end of the 1970s, investors now had a way to keep their assets safe while earning a solid return.

However, boomers were hit hard by those soaring rates, particularly through their mortgages, as most of their equity was in real estate and bank deposits. But once rates started declining in the mid-’80s, those same investors became a serious force in the investment industry. “The boomers really propelled our entire industry by jumping into more diverse and long-term investment vehicles in the ’80s,” says McInerney.

Most turned to mutual funds, which were delivering solid returns with balanced risk. Christ’s Industrial Growth Fund soared, becoming the best-performing mutual fund in the country.

A global approach

As markets evolved and 24-hour news channels brought world headlines into people’s homes, Canadians started thinking more globally about their investments.

They did the math, too: Canada is just three percent of global markets, which meant Canadians would be wise to invest some of their money in international markets for diversification. “Canadian investors became outward-looking, seeking a broader set of investment opportunities to maximize their return potential,” says McInerney.

Mackenzie responded to this more global mindset by launching a suite of international and emerging-market funds. While these funds might have appeared risky at first, investors became more savvy. They realized investing in regions like Asia and South America could actually help mitigate risk.

The 1990s were, for the most part, an era of prosperity for investors, but many received a wake-up call in the early 2000s, when the tech bubble burst and an economic recession ensued. “We were reminded yet again that markets are volatile,” says McInerney. “It was a rough ride for many, but we took action.” Mackenzie started offering investors even more opportunities to diversify, launching funds that spanned additional asset classes across a broader array of countries and sectors.

More big changes ahead

While boomers may have shaped the financial industry into what it is today, it’s generation Xers and millennials – and women, entrepreneurs, immigrants and others – who will influence the industry going forward.

As it has done before, Mackenzie will continue to innovate to meet changing investor demands. For instance, in April 2016, Mackenzie launched its first suite of exchange-traded funds. “ETFs are highly effective and efficient investment vehicles, working in combination with mutual funds,” says McInerney. The company also launched a variety of digital products and tools to make it easier for tech-savvy Canadians to manage their personal finances.

Whatever happens over the next 50 years, Mackenzie will continue to be an industry leader. “Having a culture focused on innovation and meeting investor needs means we will continue to develop an ever-evolving set of investment products and solutions,” says McInerney. “Mackenzie is a proud firm that will continue to serve and protect all Canadians into their retirement years.”

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