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Analysis: The CI Signature Canadian Balanced fund has been managed by Eric Bushell and the Signature Global Advisor team since July 2002. The fund is managed using a top down approach which is used to set the overall asset mix and sector exposure of the fund, combined with a fundamentally driven, bottom up security selection process.
While Eric Bushell is listed as the lead manager of the fund, it is very much a team effort. Within the Signature team there are a number of analysts who are well versed in the various sectors who contribute ideas to the fund.
The manager is expecting a lower growth environment going forward, and has positioned the fund accordingly. As of January 31, the fund held 12% cash, 36% bonds and 52% in equities. The equity portion of the fund tends to be focused on large cap stocks while the fixed income sleeve is mostly investment grade instruments.
From a sector perspective, the biggest weightings were in 25% in financials and 18% in energy. While these may appear to be high, they are actually underweight when compared to the benchmark. The fund is also significantly underweight in materials. The fund is also overweight in healthcare. This positioning appears to be relatively defensive.
The fund is very actively managed. For the five year period ending March 31, 2011, portfolio turnover averaged 103%, which means that on average, each investment in the fund was held for only a year. The fund is very well diversified, holding nearly 300 individual securities with the top 10 making up less than 25%.
Costs are a touch on the high side, with an MER of 2.41%, which is higher than the category median. Performance has generally been in the upper half of the category, and volatility has been slightly above the category average.
On balance, this isn’t a bad fund for investors looking for some balanced fund exposure, either on its own or as part of your portfolio.