What are we looking for?
The leaders and laggards over a decade among no-load Canadian balanced funds sold by the six big banks.
We screened for the best and worst eight funds from the Canadian balanced, Canadian neutral balanced and Canadian fixed-income balanced categories for 10 years ended July 31. These categories vary from funds holding more than 60 per cent in equities versus bonds to less than 40 per cent in equities versus bonds. U.S. dollar, segregated, pooled, fund of funds and duplicate versions of these funds were left out.
What did we find?
Monthly income funds, which aim to provide regular monthly payout as well as some capital appreciation, rose to the top of the heap over the decade. The annualized gain by the eight best performing balanced funds also outpaced the S&P/TSX total return of 3.5 per cent. CIBC's Renaissance Canadian Monthly Income Fund emerged as the leader with an average annual 11.4-per-cent gain over 10 years. But this return is a bit misleading because it hasn't always been a balanced fund. It began as the Renaissance Canadian Income Trust Fund in 2002, but changed its name in 2006 after Ottawa changed the rules requiring income trusts to convert to corporations by 2011. The former equity fund's mandate was then expanded to include bonds and dividend-paying stocks. David Graham of CIBC Global Asset Management took over the fund last fall. Excluding the CIBC fund, the TD Monthly Income Fund has been the star over a decade with an average annual return of 9.1 per cent. CIBC Balanced was the worst performing laggard with an average annual gain of 1.4 per cent. Lower fees can help returns as indicated by the fact the long-term leaders among the balanced funds all have a management expense ratio (MER) of less than 2 per cent.
|Top 8 Canadian Balanced Funds, 10-year, July 31|
|July 31||Calendar Year Returns (%)|
|Name||Category||As of July, 2010 Assets ($ mil)||Latest MER||10-yr. (%)||YTD (%)||2009||2008||2007||2006||2005|
|Renaissance Cdn. Monthly Incm||Cdn. Equity Balanced||260.8||1.82||11.4||2.6||17.0||-24.2||13.6||0.3||23.5|
|TD Monthly Income||Cdn. Equity Balanced||4,477.9||1.40||9.1||4.2||30.7||-23.4||3.1||11.4||13.4|
|RBC Monthly Income||Cdn. Neutral Balanced||7,201.2||1.14||8.5||3.4||15.4||-11.3||3.2||8.0||15.1|
|CIBC Monthly Income||Cdn. Neutral Balanced||6,408.5||1.42||7.7||2.4||12.9||-15.2||1.9||11.7||18.4|
|TD Dividend Income-I||Cdn. Equity Balanced||3,790.2||1.92||7.6||3.5||30.8||-28.8||0.1||13.2||16.7|
|BMO GDN Mnthly Div. Fd Classic||Cdn. Neutral Balanced||27.6||1.56||7.2||4.4||26.1||-20.0||1.1||3.3||9.8|
|BMO Monthly Income||Cdn. Neutral Balanced||4,831.0||1.49||6.0||3.2||16.2||-13.9||2.2||8.5||11.3|
|National Bank Dividend||Cdn. Fxd Incm Balanced||1,222.4||1.73||5.4||1.4||18.4||-19.7||-1.6||8.4||12.3|
|Bottom 8 Canadian Balanced Funds, 10-year, July 31|
|CIBC Balanced||Cdn. Neutral Balanced||578.4||2.34||1.4||1.0||12.5||-15.5||-0.1||8.2||10.2|
|Scotia Canadian Balanced||Cdn. Neutral Balanced||2,381.7||1.96||1.8||1.5||14.3||-20.2||1.4||9.6||10.7|
|CIBC Balanced Index||Cdn. Fxd Incm Balanced||32.3||1.08||1.8||0.9||13.7||-13.8||2.6||10.7||10.7|
|TD Diversified Monthly Income-I||Cdn. Equity Balanced||543.0||2.18||2.0||3.1||27.2||-25.6||2.7||8.7||9.7|
|RBC Balanced Growth||Cdn. Neutral Balanced||918.5||2.26||2.1||-1.2||9.8||-19.8||2.6||13.1||13.0|
|Altamira Tactical Asset Allocation||Cdn. Equity Balanced||81.4||1.48||2.4||1.1||22.2||-21.8||6.1||13.2||17.1|
|TD Balanced Growth||Cdn. Equity Balanced||1145.3||2.11||2.5||-1.6||16.4||-20.1||1.5||12.1||11.2|
|RBC Balanced||Cdn. Neutral Balanced||7,929.1||2.25||2.7||-0.1||13.4||-20.3||4.1||10.9||14.6|
|S&P/TSX Total Return||3.5||1.3||35.1||-33.0||9.8||17.3||24.1|
© 2007 The Globe and Mail. All rights reserved.
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