| Fund Company | Mawer Investment Management Ltd. |
| Fund Type | Canadian Equity |
| Rating | $$$$ |
| Style | GARP |
| Risk Level | Medium |
| Load Status | No Load |
| RRSP/RRIF Suitability | Excellent |
| TFSA Suitability | Excellent |
| Manager | Jim Hall since December 1999 Vijay Viswanathan since September 2011 |
| MER | 1.25% |
| Code | MAW 106 – No load units |
| Minimum Investment | $500 |
Analysis: Below average volatility, strong returns and a low MER make the Mawer Canadian Equity Fund one of our favourites in the category. Managed by the team of Jim Hall and Vijay Viswanathan, it looks for well known businesses that are trading below their true worth. The fund’s modest asset level of $975 million allows it some flexibility to go off the beaten path and look for companies which can compound their capital at a high rate for a number of years.
The portfolio tends to be fairly well diversified holding between 40 and 50 names, with the top ten making up about 40% of the fund. It is a pure Canadian equity fund and currently has no exposure to the U.S. or other foreign markets. Not surprisingly, the top ten is filled with many of the usual suspects such as TD Bank, Bank of Nova Scotia, Brookfield Asset Management and TELUS. It is also heavily weighted towards financial services, energy and industrials. Combined, these three sectors make up 65% of the fund.
Historic performance has been strong, outpacing not only the S&P/TSX Composite Index, but also the majority of its peer group. For the ten years ending May 31, it gained an average of 7.6% per year compared with the index, which posted a gain of 6.7%. Shorter term numbers have also been impressive with a three year gain of 10.9% compared to the 6.4% gain in the index.
The managers have done a great job at keeping volatility in check. For example, last year the index lost nearly 9% yet the fund gained 2%. It has a standard deviation that is lower than both the index and the category average.
The cost of the fund is very reasonable, boasting a rock bottom MER of 1.25%, well below the category average. Perhaps the biggest drawback to this fund is that it carries a minimum initial purchase of $5,000 which might put it out of reach of some smaller investors just starting out.
In our opinion, this is a great core equity fund for investors with a medium risk tolerance and a longer term time horizon. We are maintaining the fund’s rating of $$$$.