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Mutual Fund News

Balanced funds buoyed by equity gains

jnelson@globeandmail.com

What are we looking for?

Funds that posted the best gains in the popular balanced funds category.

The screen

We searched for the 15 top performers among all Canadian, global and tactical balanced funds in the year to Nov. 30. U.S. dollar, segregated, pooled and duplicate versions were excluded. We also omitted funds catering to professional groups, and those with minimum investment amounts of more than $25,000.

These funds, which hold both stocks and bonds, were popular with investors in 2013, and the money continued to pour in through the month of November, according to the most recent data from the Investment Funds Institute of Canada.

What did we find?

The Norrep Tactical Opportunities Fund was the top performer with gains of 33 per cent in the year.

This fund falls in the tactical balanced category, meaning it has a highly flexible asset allocation policy toward equity and fixed income. Portfolio manager Mark Russell said the fund, which was started amid the difficult market conditions in 2011, needed to be able to invest in various asset classes, company sizes and geographic locations.

While this year's strong performance has been driven primarily by equities, Mr. Russell says he has recently begun increasing the fund's fixed income exposure through preferred shares.

The Norrep fund invests primarily in North America, with most of the holdings being Canadian companies. "Globally, you have to be very choicey," Mr. Russell said.

In the coming year, Mr. Russell has his eye on companies with real organic growth potential. These are companies that have been putting money into expanding their businesses, rather than sitting on cash. He cites oil sands player Suncor Energy Inc. as an example now on his radar.

The majority of the top performing balanced funds in the chart fell in the global equity balanced category, however. These funds invest less than 70 per cent of total assets in Canada. EdgePoint Global Growth and Income Portfolio was the best performing fund in that group, returning 32.5 per cent for the year to Nov. 30. It also had the chart's highest three-, and five-year returns. Slightly down the list, Black Creek Global Balanced fund gained 28.5 per cent in the one-year period.

The Chou Bond Series A is the only fixed-income-focused balanced fund to make the chart. The low-fee fund returned 31.3 per cent in the period.

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15 BEST-PERFORMING BALANCED FUNDS

% return (Nov. 30)% returnAssets
Fund1-yr3-yr5-yr10-yr2012201120102009MER($-mil)Category
Norrep Tactical Opportunities Cl-A33.0%9.8%2.0057.8Tactical Balanced
EdgePoint Global G & I Portfolio FE32.4%12.9%14.9%9.0%-0.5%9.0%29.1%2.12840.1Global Equity Balanced
Chou Bond Series A31.3%5.7%13.4%12.9%-18.4%32.7%42.5%1.5739.3Global Fxd Incm Balanced
Black Creek Global Balanced A28.5%12.3%13.2%21.9%-9.4%8.8%17.6%2.59257.6Global Equity Balanced
Manulife Glb Sm Cap Bal Fund28.5%21.0%2.6045.4Global Equity Balanced
Brandes Global Balanced27.0%9.9%7.4%2.2%6.0%-1.6%2.4%3.7%2.5147.0Global Equity Balanced
Caldwell Balanced25.9%6.9%7.7%5.0%2.6%-3.7%2.0%17.5%2.7539.0Global Equity Balanced
Mackenzie Ivy Global Bal Sr A25.3%11.1%7.9%5.4%6.5%3.2%3.1%3.3%2.51263.8Global Equity Balanced
IA Group Asset Allocation-Agg Gwth25.1%9.7%11.8%9.8%-5.5%9.2%25.0%2.2172.3Tactical Balanced
Trimark Global Balanced24.9%12.3%10.5%4.9%9.7%1.5%8.3%6.6%2.63567.7Global Equity Balanced
AGF World Balanced24.6%9.8%6.3%2.8%15.7%-8.9%-5.5%11.2%2.59151.2Global Equity Balanced
Scotia Partners Max Gr Srs A23.8%8.2%12.3%5.5%10.7%-9.1%11.6%28.4%2.58544.3Global Equity Balanced
DFS Foresight 85/15 Portfolio23.7%10.2%9.7%-3.0%7.5%0.605.9Global Equity Balanced
National Bank Equity Strat Port NR23.3%8.4%10.1%5.0%10.8%-8.6%8.3%20.9%2.60141.5Global Equity Balanced
Axiom Foreign Growth Portfolio23.3%8.0%8.5%8.6%-6.4%6.9%9.8%2.744.6Global Equity Balanced
S&P 500 Composite Total Return Idx($Cdn)35.9%18.1%13.5%5.3%13.5%4.4%9.3%8.1%
MSCI World ($ Cdn)35.6%15.2%12.4%5.8%14.0%-2.9%6.8%11.8%
S&P/TSX Total Return12.9%4.1%10.9%8.3%7.2%-8.7%17.6%35.1%
Source: Lipper

© 2007 The Globe and Mail. All rights reserved.

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