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Mutual Fund News

When your fund is chest-deep in financials


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.


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 2007As of Aug 2007
Net assetsLast reported% in1-yr1-yr
Fund name($'000s)holding datefinancials% returnquartileFund category
AIC Advantage1,076,80929-Jun-0779.2010.983Canadian Focused Equity
AIC Advantage II783,91129-Jun-0779.0510.703Canadian Focused Equity
AIC Advantage II Corp Class59,94229-Jun-0758.109.613Canadian Focused Equity
TD Dividend Growth2,697,78931-Aug-0757.9010.982Canadian Div. & Incm Eq.
AIC Dividend Income306,24229-Jun-0756.183.224Canadian Focused Equity
BMO Dividend5,889,02531-May-0755.9211.612Canadian Div. & Incm Eq.
AIC Diversified Canada Corp Class56,26129-Jun-0755.143.784Canadian Focused Equity
Value Partners Canadian Equity Pool58,99531-Aug-0754.8214.523Canadian Equity
BMO Dividend Class136,95931-May-0754.1311.232Canadian Div. & Incm Eq.
Mackenzie Maxxum Canadian Value274,49731-Aug-0751.268.424Canadian Focused Equity
Investors Dividend-A13,541,86029-Jun-0751.045.743Canadian Equity Balanced
AIC Diversified Canada1,449,32629-Jun-0749.903.984Canadian Focused Equity
CI Signature Dividend2,071,40631-Aug-0749.674.094Canadian Focused Equity
Standard Life Cdn Dividend Growth-A2,200,75431-Aug-0749.2114.721Canadian Div. & Incm Eq.
TD Dividend Income3,058,74531-Aug-0747.138.322Canadian Equity Balanced
GGOF Dividend Growth667,99331-Aug-0746.9811.362Canadian Div. & Incm Eq.
AIC Canadian Focused673,02029-Jun-0746.64-5.514Canadian Focused Equity
HSBC Dividend Income-I532,89031-Aug-0746.3012.532Canadian Div. & Incm Eq.
AIC Canadian Focused Corporate Cl78,19229-Jun-0746.18-5.604Canadian Focused Equity
National Bank Dividend1,274,92731-Aug-0745.933.824Canadian Equity Balanced
Investors Cdn Large Cap Value-A2,842,77729-Jun-0745.8510.654Canadian Equity
Investors Cdn Large Cap Value Cls-A138,08829-Jun-0745.6010.404Canadian Equity
Mackenzie Maxxum Dividend1,644,36431-Aug-0745.0112.152Canadian Focused Equity
Leith Wheeler Canadian Equity B165,22329-Jun-0744.8918.251Canadian Equity
Mackenzie Maxxum Dividend Growth1,451,56231-Aug-0744.8410.643Canadian Focused Equity
Mackenzie Maxxum Dividend Class162,40731-Aug-0744.7011.832Canadian Focused Equity
IG Mackenzie Maxxum Dividend Gro-A1,400,90329-Jun-0744.1810.283Canadian Focused Equity
AGF Dividend Income788,36329-Jun-0744.055.374Canadian Div. & Incm Eq.
IA Clarington Dividend Inc400,06831-Aug-0743.758.743Canadian Div. & Incm Eq.
PH&N Dividend Income-A3,282,24831-Aug-0743.3914.282Canadian Focused Equity
RBC Canadian Dividend9,461,09429-Jun-0743.2012.762Canadian Div. & Incm Eq.
AGF Diversified Dividend Income89,12329-Jun-0741.9515.191Canadian Div. & Incm Eq.
Hartford Canadian Dividend Growth D109,78329-Jun-0741.3511.084Canadian Equity
PH&N Community Values Cdn Equ-A28,13631-Aug-0741.3119.471Canadian Equity
Social Housing Canadian Equity56,56231-Aug-0741.2719.401Canadian Equity
Northwest Canadian Dividend120,23831-Aug-0741.1514.311Canadian Div. & Incm Eq.
Desjardins Dividend1,037,53931-Aug-0738.659.053Canadian Div. & Incm Eq.


© 2007 The Globe and Mail. All rights reserved.

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