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Mutual Fund News

RBC family of funds runs the gamut

rcarrick@globeandmail.com

What we're looking at

This week's cruncher series focuses on the largest fund families in Canada. How good are their most popular funds? First up, RBC Asset Management, owned by Royal Bank of Canada.

Our screen

We've taken the 25 largest funds offered by the country's number one fund company by assets and then broken out their quartile rankings over a variety of time frames. Quartiles are the best way to measure a fund's performance. They divide funds in a category into four groups according to their returns, with first quartile being most desirable and fourth the basement. Fees are another important factor in evaluating funds. Here, we've included management expense ratios for each fund, plus the category average. Note: Big funds should be much lower than average because of economies of scale.

What we found

Several big funds of quality. RBC Canadian Dividend, the second-largest fund in the country, is doing a great job for unitholders, and so are RBC Monthly Income and RBC Global Precious Metals. There are many unspectacular but steady names here, too, including basic portfolio building blocks like RBC Canadian Equity and RBC Bond. Interesting digression: RBC Canadian Equity's biggest holding was Royal Bank of Canada as of its most recent report to Globe Investor.

There are some duds in the RBC family, too. The behemoth RBC Balanced has attracted enough money to make it the largest fund of its type, but it both charges too much and delivers too little. Also, it lost a fair bit more than its peer average in 2008. RBC U.S. Equity and European Equity are laggards, too, which is no surprise because bank fund families are often a bit squishy when it comes to investing outside Canada.

Phillips, Hager & North is part of the RBC fund family and, while no PH&N funds are giants, they do include some jewels on the bond side of things. PH&N Bond is one. Check out the first-quartile returns across the board. If you buy, go for the low-fee D version.

Top 25 RBC Funds by Assets
(May 31,2010)LatestCat. AvgQuartile May 31, 2010
NameCategoryAssets ($Mil)MERMER1-yr3-yr5-yr10-yr
RBC Canadian DividendCanadian Dividend and Income Equity10,658.21.702.362211
RBC BalancedCanadian Neutral Balanced7,941.12.252.493433
RBC Premium Money MarketCanadian Money Market7,664.90.340.891111
RBC Monthly IncomeCanadian Neutral Balanced7,096.61.142.492111
RBC Select BalancedGlobal Neutral Balanced5,767.71.852.484322
RBC Select ConservativeGlobal Fixed Income Balanced5,453.41.752.334314
RBC BondCanadian Fixed Income5,075.21.201.741222
RBC Canadian Money MarketCanadian Money Market4,708.70.890.892112
RBC Cdn EquityCanadian Equity4,617.51.962.523222
RBC Canadian Short-Term IncomeCanadian Short Term Fixed Income2,935.81.191.523223
RBC Select GrowthGlobal Equity Balanced2,625.71.952.684312
RBC U.S. EquityU.S. Small or Mid Cap Equity2,584.41.992.464334
PH&N Dividend Income-DCanadian Dividend and Income Equity2,000.31.112.361332
RBC Managed Payout Sol-Enhanced PlCanadian Equity Balanced1,962.81.842.66322
RBC European EquityEuropean Equity1,554.12.152.853243
RBC Global BondGlobal Fixed Income1,244.91.681.962312
RBC North American GrowthCanadian Focused Equity1,162.51.992.782312
RBC O'Shaughnessy Canadian EquityCanadian Focused Equity1,136.51.472.781331
RBC Managed Payout SolutionCanadian Fixed Income Balanced1,096.91.552.21211
RBC Canadian T-BillCanadian Money Market1,078.50.890.892222
RBC DS Canadian FocusCanadian Equity1,039.32.052.52432
RBC Global Precious MetalsPrecious Metals Equity988.42.042.472111
RBC Managed Payout Solution-EnhanceGlobal Fixed Income Balanced977.61.752.33311
RBC Balanced GrowthCanadian Neutral Balanced923.72.262.494444
PH&N Canadian Equity-DCanadian Equity857.41.112.523332
Source: Victor Tan, Globeinvestor.com

© 2007 The Globe and Mail. All rights reserved.

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