WHAT WE'RE UP TO
Mutual funds are a highly accessible way to invest because you can buy in for as little as $100 (TD Asset Management's funds, for example). But some fund families are a bit more exclusive. They have minimum upfront investment requirements of $5,000 or more, which makes them a stretch for some investors. Let's see if these funds deliver returns that are in line with the higher cost of buying them.
Non-money market funds with minimum upfront investments of $5,000 or more were our starting point. We've ranked them by assets and shown their 10-year quartile ranking to show you how they've performed. Quartiles break funds in a category down into four groups based on their returns. Quartile one is best, while four is the worst.
SO WHAT DID WE TURN UP?
Lots of evidence to suggest that funds with high buy-in costs are high achievers. Of the Top 20 funds on our list as ranked by assets, just a single one failed to rank in the first or second quartile for returns over the 10 years to May 31.
There are a couple of explanations for this, one of which can be found in the column of today's chart that lists the management expense ratio for each fund. When a fund has a high minimum investment, it's able to contain administrative costs by eliminating the need to service multiple small accounts. The net result for investors in some but not all cases is a lower MER. Take PH&N Dividend Income A, for example. It has an MER of 1.11 per cent, which is less than half the average 2.33 per cent for Canadian dividend and income equity funds.
Another reason for the strong returns of funds with high minimum investments has to do with the companies that offer them. In cases like PH&N, Beutel Goodman, Sceptre and McLean Budden, they're pension fund managers who run mutual funds as a sideline. Companies like ABC Funds, Chou Associates Management and Sprott Asset Management are boutique money managers with evident stock picking skills.
Note the funds on the list from the fund industry giant RBC Asset Management. They're actually wrap products, which bundle various individual funds into an instant portfolio. Wraps have become popular in recent years and we'll look at them in a future Cruncher.
|Non-money market funds with minimum upfront investments of $5,000 or more|
|Fund name||Asset class||(as of May 30)||MER Date||MER||invest.||ranking|
|RBC Select Balanced||Global Neutral Balanced||5,054,389||5/30/2008||1.68||5,000||2|
|RBC Select Conservative||Global Neutral Balanced||4,064,789||5/30/2008||1.65||5,000||2|
|PH&N Dividend Income-A||Canadian Focused Equity||2,776,569||5/30/2008||1.11||5,000||1|
|SEI Canadian Equity-O||Canadian Equity||2,479,952||5/30/2008||0.09||150,000||1|
|RBC Select Growth||Global Equity Balanced||2,426,454||5/30/2008||1.67||5,000||2|
|Sprott Canadian Equity||Natural Resources Equity||2,424,763||12/31/2007||3.27||5,000||1|
|SEI Canadian Fixed Income-O||Canadian Fixed Income||1,979,771||5/30/2008||0.10||150,000||1|
|United-Cdn Fixed Income Pool Cl W||Canadian Fixed Income||1,259,382||5/30/2008||0.17||25,000||1|
|PH&N Canadian Equity-A||Canadian Equity||1,159,786||5/30/2008||1.12||5,000||2|
|United-Cdn Equity Value Pool Cl W||Canadian Focused Equity||1,064,821||5/30/2008||0.21||25,000||1|
|PH&N Balanced-A||Canadian Neutral Balanced||925,652||5/30/2008||0.86||5,000||3|
|SEI E.A.F.E. Equity-O||International Equity||907,472||5/30/2008||0.16||150,000||2|
|Beutel Goodman Canadian Equity||Canadian Equity||884,026||3/31/2008||1.31||10,000||2|
|PH&N Bond-A||Canadian Fixed Income||843,100||5/30/2008||0.58||5,000||1|
|ABC Fundamental Value||Cdn Focused Small/Mid Cap Equity||783,875||3/31/2005||2.00||150,000||1|
|Beutel Goodman Balanced||Canadian Neutral Balanced||731,055||3/31/2008||1.19||10,000||2|
|McLean Budden American Equity||U.S. Equity||729,275||3/31/2004||1.25||10,000||1|
|United-US Equity Value Pool Class W||U.S. Equity||692,252||5/30/2008||0.21||25,000||2|
|Chou Associates||Global Small/Mid Cap Equity||670,057||12/29/2006||1.74||10,000||2|
|Sceptre Equity Growth-A||Canadian Small or Mid Cap Equity||616,027||12/29/2006||1.58||5,000||1|
|PH&N Balanced Pension Trust-A||Canadian Neutral Balanced||555,738||5/30/2008||0.55||25,000||2|
|United-Real Estate Invest Pl Cl W||Real Estate Equity||524,386||5/30/2008||0.22||25,000||4|
|Beutel Goodman Income||Canadian Fixed Income||507,964||3/31/2008||0.80||10,000||1|
|Saxon Stock Fund||Canadian Equity||445,397||5/30/2008||1.86||5,000||1|
|GBC Canadian Growth||Cdn Focused Small/Mid Cap Equity||433,725||5/30/2008||1.92||100,000||3|
|Mawer World Investment||International Equity||387,748||5/30/2008||1.43||5,000||1|
|Saxon Balanced Fund||Canadian Equity Balanced||372,271||5/30/2008||1.86||5,000||1|
|PH&N U.S. Equity-A||U.S. Equity||322,513||5/30/2008||1.16||5,000||4|
|Saxon World Growth||Global Small/Mid Cap Equity||320,953||5/30/2008||1.86||5,000||4|
|PH&N Canadian Growth-A||Canadian Focused Equity||299,691||5/30/2008||1.15||25,000||3|
|Beutel Goodman Small Cap||Canadian Small or Mid Cap Equity||280,145||3/31/2008||1.39||10,000||1|
|North Growth U.S. Equity||U.S. Equity||240,554||5/30/2008||1.20||150,000||1|
|Chou RRSP||Cdn Focused Small/Mid Cap Equity||219,856||12/29/2006||1.74||10,000||2|
|Integra Balanced||Global Neutral Balanced||218,724||12/30/2005||2.11||10,000||1|
|Saxon Small Cap||Canadian Small or Mid Cap Equity||203,443||5/30/2008||1.86||5,000||2|
|McLean Budden Balanced Growth||Global Neutral Balanced||200,879||3/31/2004||0.95||10,000||1|
|Mawer Cdn. Balanced RSP||Global Equity Balanced||199,173||5/30/2008||1.00||5,000||1|
© 2007 The Globe and Mail. All rights reserved.
Only GlobeinvestorGOLD combines the strength of powerful investing tools with the insight of The Globe and Mail.
Discover a wealth of investment information and and exclusive features.