What are we looking for?
Canny, cautious equity fund managers who are well positioned to handle an unsettled stock market.
A clear sign of caution in a fund manager is a large cash component in his or her portfolio. So let's screen Canadian, U.S. and global equity funds to find those individual funds with the highest cash weightings right now. Next, we'll pare the list down by insisting that all funds have 10-year compound average annual
returns that are above average. Being cautious in the face of an uncertain stock market is one thing. Being cautious with a past record of success is another.
So what did we turn up?
Several funds with at least 10 per cent of their holdings in cash, which shows a clear conviction that caution is warranted in
today's market. After all, equity funds charge healthy fees to
investors to choose stocks, not hold cash. A manager who parks money in cash must really
believe that stocks are going to be cheaper at some point coming up.
Just as you'd expect if you know the big names in conservative investing, CI Harbour,
Mackenzie Ivy Foreign Equity and Mackenzie Cundill Value all figure prominently on today's list. Each of these funds operate on the idea of investing in good but
undervalued companies, not
following trends, and they place a high premium on protecting unitholders in down markets. CI Harbour is worth further study if you need a Canadian equity fund, while Cundill Value has been a stronger performer in the global equity category in recent years than Ivy Foreign.
A lesser known but noteworthy name on the list is Mutual Beacon, a global equity fund that offers much lower volatility than its peers combined with returns that generally come in somewhat better than average.
Frugal-minded investors looking for something conservative might want to take a look at Beutel Goodman Canadian Equity, which had a 9.5-per-cent cash weighting at its last reporting date. This fund has a low management expense ratio of 1.42 per cent and much lower volatility than the S&P/TSX composite index. The 10-year return is comfortably above average, but results in the high-flying markets of recent years have lagged.
Globefund's fund profiles break down the holdings of individual funds, including cash, and they also show you how funds have performed over a wide variety of time frames.
|Fund name||Fund category||effective date||%||(As of Jun '07)|
|Value Contrarian Canadian Equity||Canadian Equity||12/29/2006||26.72||11.49|
|Mackenzie Ivy Foreign Equity||Global Equity||6/29/2007||18.08||6.31|
|CI Harbour||Canadian Focused Equity||6/29/2007||15.28||10.93|
|Dynamic Global Value Fund||Global Equity||4/30/2007||15.02||7.21|
|FMOQ International Equity||International Equity||3/30/2001||15.00||5.20|
|Mutual Beacon||Global Equity||12/29/2006||14.81||6.86|
|Mackenzie Cundill Cdn Security 'A'||Canadian Focused Equity||6/29/2007||13.75||11.66|
|Investors U.S. Opportunities-C||U.S. Equity||9/30/2003||13.53||4.75|
|Dynamic Dividend||Canadian Focused Equity||4/30/2007||13.49||9.76|
|Dynamic Dividend Value||Canadian Focused Equity||4/30/2007||13.38||10.10|
|CI Synergy American||U.S. Equity||6/29/2007||12.08||2.39|
|Mackenzie Cundill Value 'A'||Global Equity||4/30/2003||11.81||9.92|
|Investors U.S. Large Cap Value-C||U.S. Equity||6/30/2003||11.45||5.96|
|Stone & Co. Flagship Stock-A||Canadian Focused Equity||3/30/2007||10.60||8.89|
|Beutel Goodman Canadian Equity||Canadian Equity||6/29/2007||9.49||10.29|
|Beutel Goodman Int'l Equity||International Equity||6/29/2007||9.38||3.16|
|Mackenzie Univ US Growth Leaders||U.S. Equity||6/29/2007||8.91||2.70|
|Dynamic Canadian Dividend Fund||Canadian Focused Equity||4/30/2007||8.78||11.59|
|Mackenzie Maxxum Dividend||Canadian Focused Equity||6/29/2007||7.98||10.24|
|Investors Summa-C||Canadian Focused Equity||6/30/2003||7.21||8.92|
|Renaissance Canadian Core Value||Canadian Focused Equity||6/29/2007||7.05||11.17|
|Integra Equity||Canadian Equity||6/29/2007||6.89||9.02|
|CI American Small Companies||U.S. Equity||6/29/2007||6.65||3.28|
|United-Real Estate Invest Pl Cl W||International Equity||6/29/2007||6.62||10.97|
|BMO Dividend||Canadian Dividend and Income Equity||3/30/2007||6.39||13.55|
|AGF Canada Class||Canadian Equity||4/30/2007||5.95||8.63|
|Mackenzie Maxxum Dividend Growth||Canadian Focused Equity||6/29/2007||5.72||9.23|
|RBC Canadian Dividend||Canadian Dividend and Income Equity||4/30/2007||5.56||12.89|
|Northwest Global Equity||Global Equity||6/29/2007||5.48||5.20|
|AIM Canadian Premier||Canadian Focused Equity||6/29/2007||5.44||12.33|
|IA Clarington Dividend Inc||Canadian Dividend and Income Equity||6/29/2007||5.05||9.42|
|CIBC Dividend||Canadian Dividend and Income Equity||6/29/2007||4.88||9.61|
|Investors Global-C||Global Equity||6/30/2003||4.8||6.07|
|Fidelity True North-A||Canadian Equity||5/31/2007||4.8||11.77|
|IA Clarington Canadian Equity||Canadian Focused Equity||6/29/2007||4.79||9.42|
© 2007 The Globe and Mail. All rights reserved.
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