WHAT ARE WE LOOKING FOR?
Bank and insurance company stocks are proven performers on the Canadian stock market, and they're an ideal holding for lots of individual investors. Many mutual funds hold these stocks, too, which raises a question. Are you paying fees for a mutual fund that owns stocks you could easily and justifiably buy on your own? Let's see which funds have used financial stocks the most in their portfolios.
We started with funds in the Canadian equity, Canadian focused equity, Canadian dividend and income equity and Canadian equity balanced categories, then isolated the ones with the most exposure to the financials sector. Just for fun, we've also investigated how the big bet on financials has worked out in the past year.
SO WHAT DID WE TURN UP?
Looks like we've got a handful of widely held funds that have chowed down on financial stocks. No harm in that - the S&P/TSX capped financials index made a cumulative 144 per cent in the past five years, a bit more than the broader S&P/TSX composite. Financial stocks also pay dividends, evidence of the blue-chip that defines much of the sector.
Still, you have to ask yourself whether you're getting value for the management fees you're paying a fund that is chest-deep in financial stocks. If choosing individual stocks just isn't on as far as you're concerned, then you may be getting plenty of value. You'll have to make that call on your own by comparing returns and fees.
If you feel comfortable with the idea of owning bank and insurance company stocks directly, it's worth giving some thought to buying some as a substitute for a fund doing much the same thing. You have to pay brokerage fees to buy any stock, but they're as low as $5 to $10 at online brokers these days (see the annual online brokerage rating in today's Report on Business). Long term, those brokerage commissions will be insignificant compared with the fees paid to own funds.
|As of Aug 2007||As of Aug 2007|
|Net assets||Last reported||% in||1-yr||1-yr|
|Fund name||($'000s)||holding date||financials||% return||quartile||Fund category|
|AIC Advantage||1,076,809||29-Jun-07||79.20||10.98||3||Canadian Focused Equity|
|AIC Advantage II||783,911||29-Jun-07||79.05||10.70||3||Canadian Focused Equity|
|AIC Advantage II Corp Class||59,942||29-Jun-07||58.10||9.61||3||Canadian Focused Equity|
|TD Dividend Growth||2,697,789||31-Aug-07||57.90||10.98||2||Canadian Div. & Incm Eq.|
|AIC Dividend Income||306,242||29-Jun-07||56.18||3.22||4||Canadian Focused Equity|
|BMO Dividend||5,889,025||31-May-07||55.92||11.61||2||Canadian Div. & Incm Eq.|
|AIC Diversified Canada Corp Class||56,261||29-Jun-07||55.14||3.78||4||Canadian Focused Equity|
|Value Partners Canadian Equity Pool||58,995||31-Aug-07||54.82||14.52||3||Canadian Equity|
|BMO Dividend Class||136,959||31-May-07||54.13||11.23||2||Canadian Div. & Incm Eq.|
|Mackenzie Maxxum Canadian Value||274,497||31-Aug-07||51.26||8.42||4||Canadian Focused Equity|
|Investors Dividend-A||13,541,860||29-Jun-07||51.04||5.74||3||Canadian Equity Balanced|
|AIC Diversified Canada||1,449,326||29-Jun-07||49.90||3.98||4||Canadian Focused Equity|
|CI Signature Dividend||2,071,406||31-Aug-07||49.67||4.09||4||Canadian Focused Equity|
|Standard Life Cdn Dividend Growth-A||2,200,754||31-Aug-07||49.21||14.72||1||Canadian Div. & Incm Eq.|
|TD Dividend Income||3,058,745||31-Aug-07||47.13||8.32||2||Canadian Equity Balanced|
|GGOF Dividend Growth||667,993||31-Aug-07||46.98||11.36||2||Canadian Div. & Incm Eq.|
|AIC Canadian Focused||673,020||29-Jun-07||46.64||-5.51||4||Canadian Focused Equity|
|HSBC Dividend Income-I||532,890||31-Aug-07||46.30||12.53||2||Canadian Div. & Incm Eq.|
|AIC Canadian Focused Corporate Cl||78,192||29-Jun-07||46.18||-5.60||4||Canadian Focused Equity|
|National Bank Dividend||1,274,927||31-Aug-07||45.93||3.82||4||Canadian Equity Balanced|
|Investors Cdn Large Cap Value-A||2,842,777||29-Jun-07||45.85||10.65||4||Canadian Equity|
|Investors Cdn Large Cap Value Cls-A||138,088||29-Jun-07||45.60||10.40||4||Canadian Equity|
|Mackenzie Maxxum Dividend||1,644,364||31-Aug-07||45.01||12.15||2||Canadian Focused Equity|
|Leith Wheeler Canadian Equity B||165,223||29-Jun-07||44.89||18.25||1||Canadian Equity|
|Mackenzie Maxxum Dividend Growth||1,451,562||31-Aug-07||44.84||10.64||3||Canadian Focused Equity|
|Mackenzie Maxxum Dividend Class||162,407||31-Aug-07||44.70||11.83||2||Canadian Focused Equity|
|IG Mackenzie Maxxum Dividend Gro-A||1,400,903||29-Jun-07||44.18||10.28||3||Canadian Focused Equity|
|AGF Dividend Income||788,363||29-Jun-07||44.05||5.37||4||Canadian Div. & Incm Eq.|
|IA Clarington Dividend Inc||400,068||31-Aug-07||43.75||8.74||3||Canadian Div. & Incm Eq.|
|PH&N Dividend Income-A||3,282,248||31-Aug-07||43.39||14.28||2||Canadian Focused Equity|
|RBC Canadian Dividend||9,461,094||29-Jun-07||43.20||12.76||2||Canadian Div. & Incm Eq.|
|AGF Diversified Dividend Income||89,123||29-Jun-07||41.95||15.19||1||Canadian Div. & Incm Eq.|
|Hartford Canadian Dividend Growth D||109,783||29-Jun-07||41.35||11.08||4||Canadian Equity|
|PH&N Community Values Cdn Equ-A||28,136||31-Aug-07||41.31||19.47||1||Canadian Equity|
|Social Housing Canadian Equity||56,562||31-Aug-07||41.27||19.40||1||Canadian Equity|
|Northwest Canadian Dividend||120,238||31-Aug-07||41.15||14.31||1||Canadian Div. & Incm Eq.|
|Desjardins Dividend||1,037,539||31-Aug-07||38.65||9.05||3||Canadian Div. & Incm Eq.|
© 2007 The Globe and Mail. All rights reserved.
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