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Low fees help CI lead the pack among balanced funds

swon@globeandmail.com

What are we looking for?

Best track records among all balanced funds over a decade.

These stock-and-bond funds have gained popularity amid volatile markets of recent years.

The screen

We searched for the 15 top performers among all global, Canadian and tactical balanced funds for the 10 years ended Dec. 31, 2012. U.S. dollar, segregated, pooled and duplicate versions were excluded.

What did we find?

Three funds with 9-per-cent plus annualized returns.

CI Signature High Income led the way with a 9.8-per-cent annual gain followed by Middlefield Income Plus with 9.5 per cent and Imaxx Canadian Fixed Pay, 9.3 per cent. Given the strength of the domestic market over most of the decade, it's not too surprising that most funds had a Canadian-stock tilt to their equity side. U.S. and global stock markets, however, have fared better over the past couple of years.

While the CI fund is now in the global neutral balanced category, it was more heavily weighted to Canadian securities in the early days with a third of assets in income or royalty trusts, real estate investment trusts and high yield bonds. Ottawa's decision to tax trusts (except REITs) like corporations by 2011, however, pulled the rug from under that asset class. Outside of cash, the CI fund now has nearly 50 per cent in mostly high yield and also investment-grade bonds, and 45 per cent in dividend-paying stocks and REITs.

A shift to adding more global securities has been a "work in progress" as the Canadian market has been getting thinner with takeovers and is now dominated by sectors such as the financials, said Geof Marshall, a co-manager on the fund at CI Investments Inc. Last summer, the fund added a sizable position in Royal Dutch Shell after oil stocks took a beating.

Veteran equity names in the portfolio include Cominar REIT, Summit REIT, H&R REIT, Laborador Iron Ore Royalty and Arc Resources. It has also been long-term owners of bonds from issuers such as Sherritt International, Baytex Energy, FootLocker, MGM Resorts and Iron Mountain. The fund's lower fee versus many peers has also kept more cash in investors' hands.

*****

BALANCED FUNDS WITH THE BEST 10-YEAR TRACK RECORDS TO JAN. 31

Assetsto Jan 31Calendar year return
FundFund CategoryMER(in $ mil)10 yrs5 yrs3 yrs1 yr201220112010
CI Signature High IncomeGlobal Neutral Balanced1.604,519.89.79%7.55%11.14%12.04%11.58%4.79%15.31%
Middlefield Income Plus Corp Class-ACdn Equity Balanced2.1993.39.50%7.80%7.29%3.39%4.45%2.75%13.49%
imaxx Canadian Fixed PayCdn Equity Balanced2.67251.59.29%7.49%11.07%6.42%6.57%8.39%17.93%
TD Monthly IncomeCdn Equity Balanced1.486,718.78.37%5.08%8.49%8.17%8.48%3.57%9.82%
Renaissance Canadian Monthly IncomeCdn Equity Balanced1.92179.48.14%1.74%6.36%4.07%5.17%-2.35%11.44%
Dynamic Power BalancedCdn Neutral Balanced2.101,527.28.10%1.48%2.36%3.80%4.79%-13.70%13.46%
Dynamic Value BalancedGlobal Equity Balanced2.411,571.98.05%4.45%4.47%8.62%7.75%-12.14%11.98%
RBC Monthly IncomeCdn Neutral Balanced1.208,721.77.81%4.84%7.17%5.82%6.82%2.86%9.89%
CI Signature Income & GrowthGlobal Neutral Balanced2.432,458.17.73%4.58%7.22%9.26%9.33%-3.01%10.33%
CI Signature Canadian BalancedCdn Neutral Balanced2.421,247.27.64%3.99%5.77%6.33%6.46%-3.58%9.43%
TD Dividend Income-ICdn Equity Balanced2.045,151.17.61%3.49%8.44%9.75%9.41%1.58%8.92%
Dynamic Dividend IncomeCdn Neutral Balanced2.26764.37.57%3.97%7.50%5.32%4.46%6.75%10.26%
Manulife Monthly High Income FundCdn Neutral Balanced2.186,022.27.51%3.97%7.01%9.22%7.52%1.36%8.66%
Mawer BalancedGlobal Neutral Balanced0.96384.67.42%5.56%9.22%11.55%11.40%2.93%9.78%
Mawer Tax Effective BalancedGlobal Equity Balanced0.98165.77.23%5.52%9.13%11.67%11.56%2.13%10.15%
S&P/TSX Total Return9.52%2.25%7.53%5.01%7.19%-8.71%17.61%
S&P 500 Composite Total Return Idx($Cdn)3.43%3.91%11.74%16.06%13.46%4.42%9.35%
MSCI World ($ Cdn)4.42%1.94%8.55%15.93%14.00%-2.88%6.76%
Source: Lipper

© 2007 The Globe and Mail. All rights reserved.

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