| Fund Company | CI Investments Inc. |
| Fund Type | Global Neutral Balanced |
| Rating | $$ |
| Style | Large Cap Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Eric Bushell since November 2003 Geof Marshall since November 2003 |
| MER | 2.42% |
| Code | CIG 6116 – Front End Units CIG 6166 – DSC Units |
| Minimum Investment | $500 |
Analysis: Normally we are big fans of the funds managed by CI’s Signature Global Advisors. However, we are less than enamored with this fund. It’s not that it’s a bad fund; it’s just not outstanding. The long-term performance is quite impressive. As of May 31, the fund posted an average ten-year return of 6.1%, handily outpacing the benchmark’s 2.5% gain during the same period. Shorter term it has struggled, losing 4.5% in the past year while the benchmark gained 0.9%.
It is also more volatile than its peer group and benchmark. It has a standard deviation that is 18% higher than the category average and nearly one-third higher than the benchmark. This can be highlighted by its performance in 2008 when it dropped by 21% while the benchmark lost 3.4%. Fast forward to 2009, it posted a healthy 27.6% gain handily outpacing the benchmark by nearly 2400 basis points.
It is not all bad. It is a global balanced fund that is fairly conservatively positioned holding 8% in cash, 32% in global bonds, 25% in Canadian equity and 27% in global stocks. The underlying yield of the portfolio is higher than the benchmark while the P/E ratio is lower. This should help it not only during volatile times but also when markets move higher.
With the investment objective of providing a mix of income and capital gains, it is not surprising to see that financials are the biggest weighting, sitting at 15%. It is well diversified and the top ten holdings make up 14.3% of the fund. It does provide investors with an income thanks to the $0.025 per unit monthly distribution. At current prices, that works out to a yield of approximately 6.8%.
On balance, we have a few concerns about this fund. Our biggest is the level of volatility. This fund is more volatile than the index and peer group, and recently has not generated what we believe to be a sufficient level of excess return to justify the additional volatility. We tend to prefer funds that are less volatile. Further, we have some concerns surrounding the level of distribution that is being paid out. At 6.8%, this appears very high compared not only to the yield of the underlying portfolio, but also the total return profile of the fund. Another concern we have is with the cost of the fund. It has an MER of 2.42%, which is higher than the category average.
It is our opinion that this is not a bad fund, but we do believe there are better options in the global balanced category.