The U.S. market is one of the toughest to beat on a consistent basis, which is why I tend to favour low cost ETFs for my U.S. equity expo-sure. However, if you are looking for a well-managed, high quality, mutual fund that will give you a shot at outperforming the S&P 500 once in a while, then this fund, which mirrors the Mawer U.S. Equity Fund (MAW 108) is definitely worth considering.
Mawer has built a strong reputation with their multi-layer, disciplined, research driven investment process that looks for well-managed, high quality companies with sustainable competitive advantages that are trading well below what Mawer believes it to be worth. To find potential investment candidates, the managers screen for companies with high returns on equity that are trading at attractive valuations. Once identified, a more through fundamental review is conducted that includes a discounted cash flow analysis and the firm’s arduous scenario analysis and stress testing to get a better understanding of the stocks potential upside and downside.
Performance and volatility numbers have been respectable. While the fund has lagged the S&P 500, it has still managed to post above average results every year since 2011.
If you are using a fee based account, or are a do-it-yourself investor, I would suggest that you look at the Mawer offering directly because it offers a lower MER than even the F-Class version of this fund. The MER of the A series is a bit rich at 2.48%, the F-Class is 1.26%, and the Mawer offering comes in at a very reasonable 1.18%.
While I don’t see this fund significantly outperforming the S&P 500 on a consistent basis, it is a good option for those looking for a high quality U.S. equity mutual fund.